Harris Scarfe department chain enters receivership in horror year for retailers

Department store chain Harris Scarfe has become the latest casualty of the flagging retail sector after being placed into receivership.

The $380 million chain has 66 stores across the country from Top Ryde in Sydney's northern suburbs, Westfield Chermside and Carindale in Brisbane, Canberra, Wagga Wagga down to Geelong in Victoria, Adelaide and Hobart.

Harris Scarfe has gone into receivership less than a month after a deal to sell the chain to Allegro Funds.Credit: AFR

Harris Scarfe employs more than 1800 staff and said the appointment of DRS partners Vaughan Strawbridge, Kathryn Evans and Tim Norman was made by an unnamed secured lender to the group.

While the stores will remain fully operational and staff will be paid by the receivers, a sale process of the business will now commence.

It comes only a month after the private equity group Allegro Funds bought the business from Greenlit. That purchase included Harris Scarfe, Best & Less and the New Zealand-based Postie Plus. Only Harris Scarfe has been put into receivership.

Harris Scarfe is a longstanding retail institution.

DRS partners Vaughan Strawbridge

Harris Scarfe is a long-running chain that sells everything from bed linen to kitchenware, homewares, electrical appliances and apparel. It is aimed at the discount end of the market rather than the middle ring Myer and the upmarket David Jones demographic.

Its main competitors are Kmart and Big W which have also had to reinvent their businesses in order to survive.

"Harris Scarfe is a longstanding retail institution. We will be making every effort to secure a future for the business and intend to commence an immediate sale of business process," Mr Strawbridge said.

The DRS partners confirmed gift cards and lay-by deposits would be honoured.

Chief operating officer at landlord Vicinity Peter Huddle said it had four Harris Scarfe stores in Melbourne and Adelaide centres.

"We are continually looking at opportunities to evolve our centres to ensure we are meeting the changing needs of our consumers, which includes the opportunity to take back prime space where possible and working with new retailers to improve our product offering," Mr Huddle said.

Horror year

Harris Scarfe's receivership is the latest in a string of retail failures this year as sluggish economic growth and the rise of online shopping takes its toll.

In January Ed Harry and sportswear group Skins hit the wall followed by make-up king Napoleon Perdis and footwear group Shoes of Prey.  Melbourne-based institution Dimmeys is shutting its doors and the Co-Op Bookshop went into administration last month.

Bill Rooney, the chief executive of 6one5 Retail Consulting Group, a retail strategy consultancy and digital training business, said the retailers that don't adapt to the changing demographics of the shopping population would perish.

Mr Rooney's research shows the biggest winners will be retailers selling to the growing working Gen Z population.

The biggest losers would be retailers selling to the 40 years and over market where the working population will continue to decline.

"No matter how good you are as a retailer, in 2019 the 40 years and older market is in serious decline and only a major change of strategy and direction will arrest the decline," Mr Rooney said.