Harris Scarfe

Harris Scarfe is an Australian retailer that sells bed linen, kitchenware, homewares, electrical appliances and apparel. Its headquarters are in Melbourne. It has a growing e-commerce retail presence in Australia and is considered a multi-channel department store retailer.

Harris Scarfe
TypeRetail, eCommerce
IndustryRetail
FateReceivers and Managers appointed
Founded1849 (1849)
FoundersGeorge Peter Harris and George Scarfe in Adelaide
Headquarters
Richmond, Victoria
,
Australia
Number of locations
43 Stores
ProductsBed linen, homewares, kitchenware, manchester, electrical goods, kitchen appliances, women's and men's apparel, intimates, footwear and luggage
Number of employees
1200 (as of April 2020)
Parent
  • Greenlit Brands (2014 - November 2019)
  • Allegro Funds (since November 2019)
Spotlight Retail Group (since April 2020)
Websiteharrisscarfe.com.au

Founded in 1849, Harris Scarfe currently operates 66 retail stores nationally in two formats including "Harris Scarfe" department stores and "Harris Scarfe Home" homewares and kitchenware stores.

In December 2019, Harris Scarfe entered into voluntary administration after 170 years in operation. As of June 2020, 23 of its 66 stores have closed from its peak at 66 stores, from September 2019 - June 2020.

History

Early history
Harris, Scarfe advert October 1881

Harris Scarfe traces its history to 10 February 1849, when George Peter Harris and John C. Lanyon, arrived in Adelaide, South Australia on the ship Candahar and established a hardware and ironmongery business on Hindley Street. Lanyon left the partnership on 22 February 1855 and returned to London, where he opened a buying house for Geo. P. Harris and other businesses in South Australia. Additional partners, George Scarfe and Richard Smith, joined the business in 1866 and the business name "Geo. P. Harris, Scarfe & Co." was adopted in December that year.[1] They had premises on the east side of Gawler Place, midway between Rundle and Grenfell streets, where Allan's building now stands (58-60 Gawler Pl). A new four-storey building, on a 70 by 70 feet (21 m × 21 m) freehold property between Rundle and Grenfell streets, was erected behind their old (leased) property in 1929.[2]

Harris Scarfe grew to become a major supplier of a broad range of household, agricultural and industrial items. Besides conducting its retailing businesses, Harris Scarfe manufactured leather goods, including saddlery and luggage, as part of a wholesaling operation. Notably, during World War II, when the Australian Government enforced price controls, it used the Harris Scarfe catalogue as the price guide.

1970s - 1980s

In 1971, Baradeen Quest Pty Limited, a subsidiary of Investment and Merchant Finance Corporation Limited ("IMFC") made a successful takeover bid for Harris Scarfe Limited, which was listed on the Australian Stock Exchange at the time.

Charles Davis Limited, a listed Tasmanian company controlled by Sir Donald Trescowthick, acquired control of Harris Scarfe in 1976. Trescowthick focussed Harris Scarfe's activities on its retailing business, developing a full line department store model, while the industrial products outlet at Mile End evolved to become Harry's, a large hardware retailing business.

The success of Harry's led Harris Scarfe's parent company, Charles Davis Limited, to acquire other hardware retailers, including Lloyd's in South Australia, Campbell's in Queensland, and McEwans in Victoria and New South Wales. In 1989, these hardware businesses were sold in a management buyout, and acquired by Bunnings in 1993.

1990s

In the 1990s, Harris Scarfe entered an era of unprecedented national growth. It expanded beyond its large department store in Rundle Mall into smaller format suburban and regional shopping stores. Harris Scarfe also acquired full-line department store sites from other retailers who were rationalising their store networks including David Jones, Myer, John Martins, Stirling and Centre Fair. By 1995, Harris Scarfe had become Australia's third largest department store retailer, with 38 stores, and trading in all states of Australia.

The company ran into trouble during the late 1990s due to rising debts and management issues. In April 2001, the business was placed in receivership. Unsecured creditors were owed $93 million, and the company was $50 million in debt.[3] In June 2002, the company's former chief financial officer, Alan Hodgson, was sentenced to six years in jail, on multiple counts that included giving false information to the ASX, and failing to act honestly as a company officer.[3]

2000s

In 2001, Harris Scarfe listed on the Australian Securities Exchange (ASX). In the same year, the company fell $160 million into debt, resulting in the owners, the Trescowthick family, losing $31.5 million. The government initially considered pressing charges against chairman Adam Trescowthick, but later dropped the case.[4]

In 2002, the company started a revitalisation program. The store network was remodelled with new products, layouts and new branding. As a result, Harris Scarfe soon began to enjoy record growth. By 2007, Sydney-based Momentum Private Equity acquired an $80 million majority stake in the company. During 2012, Momentum Corporate then sold the business to Pepkor, a South African private equity firm.

Over a six-month period at the end of 2003, Harris Scarfe made certain representations on a number of items in its catalogues in relation to pricing. Harris Scarfe admitted to the Australian Competition and Consumer Commission (ACCC) that representations in its promotional advertising may have misled consumers.[5]

Again in 2007 Harris Scarfe was investigated by the Australian consumer watchdog who sued the department store in the Australian Federal Court over allegedly false promotions for its sales in October 2006. The ACCC alleged that the advertising was misleading because Harris Scarfe was not offering what it advertised:

  1. A discount off all goods in its stores.
  2. A minimum of 20% off all goods in its stores.

The ACCC also alleged that the catalogue included images of products under banners stating a specific discount when some of those goods were not discounted by the stated percentage.[6]

In 2009, the Federal Court, Adelaide has declared that Harris Scarfe Australia Pty Ltd misled consumers by representing in a catalogue that certain advertised items were discounted by a specific amount when in fact they were discounted by less than that amount, or were not discounted at all.[7]

Harris Scarfe CEO, Robert Atkins, resigned from the top post at Harris Scarfe in March 2009 after eight years leading the turnaround of department store.[8] He played a significant role in the restructuring of retail trading hours in South Australia and in the revitalisation of the state's premium retail precinct as chairman of the Rundle Mall Management Authority.[9] Robert Atkins died in January 2010.

After Robert Atkins' successful tenure leading Harris Scarfe, Joe Barberis was named managing director of the retailer in February 2009 until September 2014.[10] Graham Dean, previously Myer group general manager of Electrical, was named CEO of Harris Scarfe.

In 2012, Kyly Clarke became the face of Harris Scarfe's fashion home brand 'Boutique@hs'.[11]

As of 2014, Greenlit Brands, formerly Steinhoff Asia Pacific, acquired Pepkor and this included Harris Scarfe. Harris Scarfe has been owned by Greenlit Brands since this time.[12]

In January 2014, General Manager of Harris Scarfe Daniel Nikoleaff was demoted to Area Manager of South Australia.[13] Nikoleaff was replaced by Rebecca Peterson previously CEO of Lovisa jewellery stores.

In October 2013, Harris Scarfe officially launched Simply Vera,[14] by Vera Wang which is designed by Vera Wang who is based in New York City. The collection comprises a range of contemporary women's fashion, accessories, bed and bath collections and home fragrances.

Harris Scarfe's home brand 'Bulls Head' jeans were found to have azo dyes classed as carcinogens in the pocket linings. The jeans were recalled in July 2015.[15]

In 2017, Harris Scarfe also collaborated with Shaynna Blaze,[16] an interior designer from The Block on bed linens, homewares, accessories and apparel.

In October 2017, just before the Steinhoff corruption scandal unfolded, Steinhoff International appointed former The Good Guys boss Michael Ford, to oversee its Australasian operation. He had left behind a retailer that had to be significantly restructured due to cash flow problems and a lack of stock in the business.[17]

British Fashion brand Debenhams granted exclusivity to Harris Scarfe for their launch in Australia in February 2017.[18] The arrangement was short lived and Harris Scarfe parted ways with Debenhams in November 2019.[19]

During April 2018, they launched a new collection with Jamie Durie, TV personality The Outdoor Room named Jamie Durie by Ardor[20] which is a casual bed linen product range.

Channel Seven Morning Show presenter Kylie Gillies was named Harris Scarfe's fashion ambassador in August 2018.[21]

In December 2019, parent company Greenlit Brands sold both Harris Scarfe and Best & Less to Australian private equity firm Allegro Funds.[22][23][24]

2019 - 2020: Voluntary administration, Trading Insolvent, Supplier Scandal and Unfair Dismissal Case

On 11 December 2019, Harris Scarfe under General Manager Rebecca Peterson,[25] entered voluntary administration, with Deloitte Restructuring Services partners taking over management of the business. The retailer reported $380 million in annual sales earlier in the year. At the time, Harris Scarfe had 66 stores employing 1800 staff.[26][27] In response, the Shop, Distributive and Allied Employees Association labour union said that they would be filing a complaint with the Fair Work Commission because they were not informed in advance. Deloitte claims Harris Scarfe has "more than sufficient" assets to pay all staff entitlements.[26] In January 2020, Harris Scarfe announced it would close 21 of its 65 stores, resulting in the loss of 440 jobs. 1380 staff would remain in the 44 stores still in operation.[28] The closures consist of one in South Australia and in the Australian Capital Territory, two in Western Australia, three in Victoria, six in Queensland, and eight in New South Wales.[28][4] As of 2 February 2020, 20 stores have closed, with the store in Earlville, Cairns, being spared from closure, leaving 45 stores, being 3 in Australian Capital Territory, 3 in Queensland, 5 in Tasmania, 5 in New South Wales, 8 in South Australia and 21 in Victoria.

During this time Harris Scarfe's credit card services and interest free offers were no longer honoured or available.[29]

On 3 March 2020, it was announced that fabric and home fitting store Spotlight will purchase the remaining stores.[30][31]

On 31 March 2020 Harris Scarfe laid off a further 59 staff, announced the day after Australian Prime Minister Scott Morrison announced the national JobKeeper Scheme. Deloitte, which acted as Harris Scarfe's receiver, expects the sale to be finalised just after Easter. Staff were initially told the redundancies were being made due to the current economic conditions and COVID-19 crisis. This was later backtracked to claim the redundancies were part of the sale process. And that, while Harris Scarfe will be applying for the Government's JobKeeper initiative to support remaining staff, those let go on 'restructuring' grounds may not be supported under the payment scheme.[32] Harris Scarfe HR Lauren Barry[33] told media that she was "happy to send redundant workers to Centrelink with a letter provided" by the collapsing company[34]

On 3 April 2020, Smart Company reported Harris Scarfe was being investigated by the retail union for possibly breaching the Fair Work Act and treating their staff unfairly.[35]

The Mercury newspaper in Tasmania reported on 7 April 2020, Harris Scarfe's newly renovated Hobart store would be closing.[36][37]

The Australian Financial Review reported on 8 April 2020 that Harris Scarfe was still in the red despite the Spotlight deal.[38] On 9 April 2020 Channel News added "Several appliance and CE distributors are set to only get between 1.3¢ and 20.5¢ in the dollar under a proposed deed of company arrangement for the failed Harris Scarfe, Allegro the Company who owned the stores for only three weeks will get $70M...The Australian Financial Review reported that the receivers blamed Harris Scarfe’s collapse on loss-making stores, most of which opened between 2014 and 2019, and the retailer’s inability to access funding after the sale to Allegro, which is the first ranking secured creditor and will receive a return of almost $70 million."[39]

On 24 April 2020, The Herald Sun reported Harris Scarfe became insolvent the moment private equity firm Allegro Funds took control of the struggling department store chain.[40] Days later Channel News had spoken to unhappy suppliers who were allegedly ripped off and believe the company's collapse was an orchestrated con.[41] Channel News in a follow up reported Harris Scarfe had illegally traded insolvent during December 2019.[42]

Commercial Real Estate reported on 28 April 2020 that Harris Scarfe's new owner Spotlight refused to pay its monthly rent for all stores. They were unwilling to work with landlords, demanding a 50% reduction on all rent. Spotlight also had yet to pay $50 million for the newly acquired Harris Scarfe.[43] Former Queensland Premier Campbell Newman described Spotlight's actions as: "unconscionable conduct ... Many landlords have received 'take it or leave it' letters proposing significant rent concessions or outright rent waivers. Landlords are reporting that they have been threatened and pressured to accept ... At the same time, many of these companies have actually seen improved sales turnover." Mr Newman said.[43]

As of April 2020, approximately 1200 staff remain.[44]

In July 2020, The Fair Work Commission ruled the Shop, Distributive and Allied Employees Association (SDA Union) knowingly acted against the best interests of former Harris Scarfe employees when it decided to hold off filing unfair dismissal claims on their behalf within the required 21 days. Without informing the employees, the SDA's national executive opted against filing their claims after being told by the Harris Scarfe administrator the legal challenges would jeopardise a looming sale of the fallen department store chain, which continued to employ 1200 workers.[45]

The Retail and Fast Food Workers Union said: "It will come as no surprise that the SDA sold out unfairly sacked Harris Scarfe workers to keep in favour with the boss and keep those payroll deductions flowing. Today the Fair Work Commission found: "Rather than take any step to deal with the obvious conflict of interest, Mr Griffin did nothing, and worse still, did not inform the Applicant that the SDA had made a deliberate decision, contrary to her interests, not to lodge the application within the 21 day period." [46][47]

Smart Company reported on 31 July that Harris Scarfe had been hiring new staff shortly after Harris Scarfe made redundancies in March. "On May 5, five weeks to the day after the redundancies, Harris Scarfe’s area manager (Daniel Nikoleaff[48]) for South Australia and Tasmania instructed store managers via email to refrain from hiring new staff in stores where team members had been made redundant. They were told the general manager of operations (Rebecca Peterson[49]) would advise when hiring in these stores would resume, and it wasn’t long before that began happening." Harris Scarfe refused to comment on the redundancies and still cannot provide a reason for the redundancies, although the SDA insinuates it was a condition of sale to Spotlight.[50]

On 16th November 2020, Harris Scarfe Elizabeth, South Australia was declared a Covid-19 hotspot.[51][52][53]

Store formats

Harris Scarfe department stores sell a full range of bed linen, homewares, cookware, manchester, apparel, electrical appliances, kitchen appliances, menswear, womenswear, intimates, sportswear, travel and outdoor. Harris Scarfe stores are located across South Australia, Victoria, Tasmania, New South Wales, Australian Capital Territory and Queensland. There are currently 38 Harris Scarfe stores.

Harris Scarfe Home stores sell homewares including bed linen, homewares, cookware, kitchen appliances, electrical goods, personal care and bathroom electrical. Harris Scarfe Home stores are located across South Australia, Victoria and Queensland. There are currently five Harris Scarfe Home stores.

Product categories

Harris Scarfe stores sell the following products:

  • Bed Linen & Manchester – bedding, linen, towels, manchester, pillows, decorative cushions
  • Homewares – crockery, cutlery, glassware, food preparation
  • Kitchenware and Cookware – cook sets, fry pans, cast iron
  • Personal Care & Bathroom Electrical – hairdryers, shavers
  • Kitchen Appliances – kettles, toasters, food processors, blenders
  • Electrical Appliances - heaters, fans, cookers, grills, toasters
  • Clothing and Apparel - womenswear, menswear
  • Travel – luggage, accessories

Exclusive brands
  • Smith + Nobel — Harris Scarfe's budget "home" brand.[54]
  • Simply Vera — a range of women's fashions associated with New York designer Vera Wang.[55][56]
  • Shayna Blaze — homewares collection from Australian designer Shaynna Blaze.[57]
  • Jamie Durie - By Ardor — homewares from Australian designer and TV host Jamie Durie.[58]
  • MOZI — Australian-designed homewares.[59]

References
  1. "Advertising". The Adelaide Express. IV (914). South Australia. 17 December 1866. p. 2. Retrieved 22 October 2018 – via National Library of Australia.
  2. "Big Developments Expected Soon in Gawler Place". The Register News-pictorial. South Australia. 31 January 1929. p. 12. Retrieved 8 May 2020 – via Trove.
  3. "Former Harris Scarfe executive jailed six years". The Age. Australian Associated Press. 27 June 2002. Retrieved 29 December 2019.
  4. Baird, Lucas (6 January 2020). "440 jobs, 21 stores to go at Harris Scarfe". Australian Financial Review. Retrieved 21 January 2020.
  5. Commission, Australian Competition and Consumer (23 February 2013). "Harris Scarfe admits sale prices may have misled, issues public apology". Australian Competition and Consumer Commission. Retrieved 2 April 2020.
  6. "ACCC challenges Harris Scarfe ads". SmartCompany. 12 October 2007. Retrieved 2 April 2020.
  7. Commission, Australian Competition and Consumer (23 February 2013). "Court declares Harris Scarfe misled consumers". Australian Competition and Consumer Commission. Retrieved 2 April 2020.
  8. "Ex-Harris Scarfe boss Robert Atkins dies". The Sydney Morning Herald. 15 January 2010. Retrieved 11 April 2020.
  9. retailbizc0rD8 (15 January 2010). "Former Harris Scarfe CEO Robert Atkins dies". retailbiz. Retrieved 11 April 2020.
  10. Barberis, Joe (11 April 2020). "Joe Barberis LinkedIn". LinkedIn.
  11. Rota, Genevieve (14 October 2012). "Kyly Clarke Is The Face of New Label Boutique@hs!". POPSUGAR Fashion Australia. Retrieved 11 April 2020.
  12. https://dealbook.nytimes.com/2014/11/25/steinhoff-international-to-buy-pepkor-of-south-africa-for-5-7-billion/
  13. Nikoleaff, Daniel (April 2020). "Daniel Nikoleaff - LinkedIn". LinkedIn.
  14. "Simply Vera Vera Wang". Retrieved 3 March 2020.
  15. Australia, Product Safety (28 July 2016). "Harris Scarfe Pty Ltd—Bulls Head Men's Black Regular & Short Leg Jeans". Product Safety Australia. Retrieved 2 April 2020.
  16. "Shayna Blaze". Retrieved 3 March 2020.
  17. "INSIGHT: Harris Scarfe Liquidation, 'Dodgy Deal' Or Acceptable 'Stitch Up' By Allegro Funds, Suppliers Angry – channelnews". Retrieved 29 April 2020.
  18. "Big British Brands From Debenhams, Exclusive To Us". Harris Scarfe. 9 February 2017. Retrieved 11 April 2020.
  19. Powell, Dominic (19 November 2019). "Best & Less, Harris Scarfe back in Australian hands". The Sydney Morning Herald. Retrieved 11 April 2020.
  20. "Jamie Durie". Retrieved 3 March 2020.
  21. "Our newest fashion ambassador". Harris Scarfe. 7 August 2018. Retrieved 11 April 2020.
  22. Powell, Dominic (19 November 2019). "Best & Less, Harris Scarfe back in Australian hands". The Sydney Morning Herald. Retrieved 11 December 2019.
  23. McIlvaine, Heather (19 November 2019). "Greenlit Brands offloads Best & Less, Harris Scarfe and Debenhams". Inside Retail. Retrieved 21 January 2020.
  24. Mitchell, Sue (18 November 2019). "Greenlit Brands' Harris Scarfe, Best & Less sold to Allegro". Australian Financial Review. Retrieved 11 December 2019.
  25. Peterson, Rebecca (2 April 2020). "LinkedIn Profile". LinkedIn.
  26. Marsh, Stuart (11 December 2019). "Aussie retailer Harris Scarfe collapses after 170 years in business". Nine News. Retrieved 11 December 2019.
  27. Cummins, Carolyn (11 December 2019). "Harris Scarfe department chain enters receivership in horror year for retailers". The Sydney Morning Herald. Retrieved 11 December 2019.
  28. Blake, Dean (6 January 2020). "Harris Scarfe closing 21 stores". Inside Retail. Retrieved 21 January 2020.
  29. "Harris Scarfe Value Plus Card: Currently Unavailable – Harris Scarfe Value Plus Credit Cards". Retrieved 11 April 2020.
  30. Powell, Dominic (3 March 2020). "Spotlight set to save Harris Scarfe from collapse". The Sydney Morning Herald. Retrieved 3 March 2020.
  31. Siebert, Bension (3 March 2020). "Spotlight wins right to buy Harris Scarfe". InDaily. Retrieved 3 March 2020.
  32. "Harris Scarfe lays off 59 staff, offers referrals to Centrelink". Inside Retail. 1 April 2020. Retrieved 2 April 2020.
  33. Barry, Lauren (1 July 2020). "Lauren Barry LinkedIn Profile". LinkedIN. Retrieved 1 July 2020.
  34. "Subscribe to The Australian | Newspaper home delivery, website, iPad, iPhone & Android apps". www.theaustralian.com.au. Retrieved 1 July 2020.
  35. "Harris Scarfe workers outraged as receivers make 59 staff redundant the day after wage subsidy announcement". SmartCompany. 3 April 2020. Retrieved 3 April 2020.
  36. "Subscribe to The Mercury". www.themercury.com.au. Retrieved 11 April 2020.
  37. "Subscribe to the NT News". www.ntnews.com.au. Retrieved 11 April 2020.
  38. "Harris Scarfe creditors in the red despite Spotlight deal". Australian Financial Review. 8 April 2020. Retrieved 11 April 2020.
  39. "Harris Scarfe CE & Appliance Suppliers Set To Only Get Cents But 5 Week Owner Gets $70M – channelnews". Retrieved 11 April 2020.
  40. "Heraldsun.com.au | Subscribe to the Herald Sun for exclusive stories". www.heraldsun.com.au. Retrieved 29 April 2020.
  41. "INSIGHT: Harris Scarfe Liquidation, 'Dodgy Deal' Or Acceptable 'Stitch Up' By Allegro Funds, Suppliers Angry – channelnews". Retrieved 29 April 2020.
  42. ""Ripped Off" Insolvent Harris Scarfe Allegro Funds Deal, Looks Like Another Dick Smith Anchorage Capital Saga – channelnews". Retrieved 29 April 2020.
  43. Schlesinger, Larry (28 April 2020). "Spotlight halts April rent, demands 50pc cut". Commercial Real Estate. Retrieved 29 April 2020.
  44. "Harris Scarfe workers outraged as receivers make 59 staff redundant the day after wage subsidy announcement". SmartCompany. 3 April 2020. Retrieved 11 April 2020.
  45. "RETAIL UNION LASHED AFTER BOTCHED DISMISSAL CLAIMS". Herald Sun. 11 July 2020.
  46. "Retail and Fast Food Workers Union". www.facebook.com. Retrieved 18 July 2020.
  47. "[2020] FWC 3031". www.fwc.gov.au. Retrieved 18 July 2020.
  48. Nikoleaff, Daniel (31 July 2020). "Daniel Nikoleaff LinkedIn Profile". LinkedIn.
  49. Peterson, Rebecca (31 July 2020). "Rebecca Peterson's LinkedIn Profile". LinkedIn.
  50. "How JobKeeper and the retail union failed Harris Scarfe workers". SmartCompany. 31 July 2020. Retrieved 31 July 2020.
  51. "FULL LIST: Buses, shopping centres and hotel among COVID exposure sites in SA". 7NEWS.com.au. 16 November 2020. Retrieved 22 November 2020.
  52. "These are all the places potential coronavirus cases visited in Adelaide, and what to do if you were there too". www.abc.net.au. 20 November 2020. Retrieved 22 November 2020.
  53. "SA venues with COVID alerts double". Observer. Retrieved 22 November 2020.
  54. "Search smith and nobel | HS Site". www.harrisscarfe.com.au. Retrieved 11 April 2020.
  55. Sweaty Betty PR (25 September 2013). "Simply Vera – Vera Wang for Harris Scarfe". Gracious Magazine.
  56. Garland, Phoebes (22 October 2013). "Simply Vera – Vera Wang collaborates with heritage department store Harris Scarfe". fashioninitiative.com.au.
  57. Forte Magazine (18 October 2017). "Shayna Blaze for Harris Scarfe". Forte Magazine.
  58. Harris Scarfe (16 April 2018). "The Art of bringing the outdoors in with Jamie Durie by Ardor". hub Harris Scarfe.
  59. Houzz (20 October 2018). "MOZI Lifestyle Brand Exclusively at Harris Scarfe". hub Houzz.
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