National home goods and apparel retailer Harris Scarfe, which has four stores in the ACT, has been placed into receivership and will immediately go on the market to be sold as a going concern.
The news could not come at a worse time, two weeks before Christmas, for its 1800 staff nationwide.
Harris Scarfe has stores in Dickson, Westfield Belconnen, Canberra Outlet Centre in Fyshwick and South.Point in Tuggeranong.
The secured lender to the group appointed Deloitte Restructuring Services partners Vaughan Strawbridge, Kathryn Evans and Tim Norman as receivers and managers over Harris Scarfe and a number of associated entities after the retailer went into voluntary administration.
Mr Strawbridge said in a statement that trading would continue as normal over the Christmas period and employees will continue to be paid by the Receivers.
He also said he was confident assets were more than sufficient to meet all employees’ entitlements and the receivers intended to sell the business as a going concern and preserve as many jobs as possible.
The receivers will honour gift cards and lay-by deposits in full.
“Harris Scarfe is a longstanding retail institution,” Mr Strawbridge said. “We will be making every effort to secure a future for the business and intend to commence an immediate sale of business process.”
Harris Scarfe operates 66 stores selling bed linen, kitchenware, homewares, electrical appliances and apparel. It has annual sales totalling $380 million.
Store managers and staff have been told not to comment.
The union representing Harris Scarfe workers said the announcement came without warning and staff were shocked.
SDA National Secretary Gerard Dwyer said the union was deeply concerned at the news, which came only a month after private equity firm Allegro Funds acquired the retailer.
“It is yet another reminder that private equity companies have no long-term interest in retail and the employees in our industry – first Myer, then Dick Smith, now this,” he said.
“The SDA demands that the receivers demonstrate how they plan to live up to their assurances that Harris Scarfe workers will be paid in full as stores continue to trade through the peak Christmas period.”
He said the union would file a dispute with the Fair Work Commission over the company’s failure to consult with the SDA prior to the announcement.
“Just as importantly, SDA is seeking urgent consultations with the receivers to guarantee that there are in fact sufficient funds (as Deloittes have stated) to meet the legal entitlements of all employees,” he said.