Luxury Australian fashion retailer Harrolds has collapsed into liquidation after 39 years in business with debts of $16million.
SMB Advisory was appointed as the liquidator on October 3.
According to documents lodged with regulators, more than 90 creditors are owed money, including Victoria Beckham‘s company which is owed $30,000, and two of Tom Ford’s companies with a combined debt of $33,000.
Harrolds also owes over $2.3million to the Australian Taxation Office, while its employees are owed $190,000 in entitlements.
Founded in 1985 on Melbourne‘s Collins Street, Harrolds expanded to outlets in Melbourne, Sydney and the Gold Coast.
In July, it closed its stores in Sydney and Melbourne, following the earlier closure of its Gold Coast outlet in 2021, but had announced new venues.
‘We have had to pull many levers during the last 12 months to mitigate the impacts of Covid-19 to our business nationally, including reducing operating expenses and attempting to negotiate revised rental agreements,’ Harrolds’ managing director Ross Poulakis said after closing the Gold Coast outlet.
The company said it would move into Westfield’s new development on Market Street in Sydney and to launch a new store in central Melbourne.
Founded in 1985 on Melbourne ‘s Collins Street, Harrolds was Australia’s only privately-owned department store, expanding to outlets in Melbourne, Sydney and the Gold Coast
Luxury Australian fashion retailer Harrolds has collapsed into administration owing more than $16million after 39 years in business
Harrolds also announced in July that it would be temporarily closing its online store.
The closures come amid a very difficult trading environment for retailers of non-essential items as the cost-of-living crisis has left many with little left over for discretionary spending.
The Harrolds announcement come just weeks after Fashion giant Mosaic Brands announced it would close down five of its major retail franchise chains.
Rockmans, Autograph, Crossroads, W.Lane and BeMe brands – including their stores and websites – will be shut down, Mosaic CEO Erica Berchtold confirmed on October 1.
The company is Australia’s largest women’s fashion retailer group and had employed more than 4,000 staff in more than 700 stores around the country.
Ms Berchtold said the shuttered brands had ‘become marginal and non-core’ and closing them would allow the company to focus on its remaining five.
‘Each of those core brands will have a clearly differentiated market proposition, target customer, price point and product range.’
The group will now focus on Millers, Noni B, Rivers and Katies.
‘Whilst the operational details of the rationalisation plan, including store closures, continue to be worked through, we will seek to minimise the impact on our team, including where possible reassigning impacted team members into roles within the five core brands,’ she said.
Professor Gary Mortimer, Queensland University of Technology Business School retail expert, told News Corp that Mosaic Brands made the mistake of ‘essentially creating multiple brands to market to the exact same audience – middle aged, middle class woman’.
‘If you walk into a shopping centre, you will find at least two, if not three, of those brands all competing for the same customer and that just duplicates and triplicates the cost of doing business.’
Professor Mortimer likened the overlap to what Kmart and Target – both owned locally by Wesfarmers – were doing, often competing against themselves.
