Harris Scarfe
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Harris Scarfe Department Stores was founded in South Australia in 1850 in Adelaide, South Australia. At its peak, Adelaide was home to several major South Australian department stores (including Harris Scarfe, John Martins and Birks and Moore's), of which Harris Scarfe is the sole survivor. Adelaide is now the only Australian capital city with three major department stores in the main shopping strip (the other two stores being David Jones and Myer).
Today Harris Scarfe has two formats, one for its flagship Rundle Mall store, and another for its smaller stores found elsewhere. These smaller stores sell a range of cheap items, similar to K-Mart and Big W, though much smaller. It is more upmarket than The Warehouse but less than Myer.
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[edit] 1990's Expansion
In the 1990’s Harris Scarfe began an era of unprecedented growth, both within South Australia, and interstate. It expanded from its single large store in Rundle Mall into a smaller format for suburban and regional shopping centres (several of these stores were formerly occupied by the defunct Venture chain), as well as acquiring full line department store sites from other retailers (including David Jones (Cairns, Townsville and Macarthur Square), John Martins (Elizabeth and Arndale), Myer (Colonnades) and Stirlings (Albany, Bunbury and Geraldton)).
This growth began in South Australia. This was assisted by the demise of the Venture chain of stores previously found throughout the country. At Harris Scarfe’s peak, the company operated 38 stores in all Australian States.
The company continued its aggressive expansion interstate, opening stores in New South Wales, Queensland, Tasmania, Victoria (Australia) and Western Australia. The company acquired a large amount of its retail space (and its largest stores) as a result of Australia’s two largest department store chains Myer and David Jones rationalizing their chains. The company’s expansion into Tasmania was accelerated by the merger with the Tasmanian department store chain Fitzgeralds (better known to locals as "Fitzys") in 1995.
[edit] Bankruptcy
In 2001 Harris Scarfe suppliers and customers, and even a large amount of the company’s staff were shocked when the thriving business was suddenly faced with cash-flow problems. The company made headlines in South Australia when concerned suppliers, from whom Harris Scarfe had purchased large amounts of stock on credit, entered the flagship store in Rundle Mall, and began retrieving their stock directly from the shelves, before shocked staff and customers.
The company soon entered voluntary receivership, and its shares were withdrawn from the Australian Stock Exchange. Examination of the company’s books revealed that assets had been re-valued well above market value in an effort to conceal its spiralling losses. This practice had left the company with multimillion-dollar debts.
[edit] Revitalisation
Harris Scarfe was sold to a private consortium, with the shareholders receiving little or no proceeds of the sale. The consortium set out to firstly stabilise the business, with possible expansion and a refloat on Australian Stock Exchange in the future.
The consortium began a store rationalisation program as a measure to help restore profits. In the days after the purchase all stores in Queensland and New South Wales, where Harris Scarfe was under represented were closed. In its home state of South Australia two suburban stores were closed, Munno Para in the north, and Woodcroft in the south. The same occurred in Victoria and Tasmania, with a limited number of unprofitable store closures. In the final stage of rationalisation it was decided the business would also withdraw from the Western Australia market.
The company then started a revitalisation program. The remaining stores were remodelled with new stock, new layouts and a new company logo. This was then followed by an extensive advertising campaign. As a result Harris Scarfe soon began to enjoy record sales.
[edit] Today
In 2002 Harris Scarfe opened its first new store after the revitalisation at Werribee in Victoria. This was seen as a major step forward for the new company and resulted with much success in the growing Werribee area. Harris Scarfe Werribee is now the flagship store in the Victorian branch.
In 2006, Harris Scarfe reopened their completely refurbished store at Colonnades SA, as part of the centres refurbishment. The store reopened with a reduction in floor-space, occupying only the ground floor of its original 3-floor store. The upper levels are planned to house a new Best and Less, JB Hi-Fi, and Cheap as Chips discount store.
On March 16 2007 Momentum Private Equity took a controlling interest in Harris Scarfe in a deal worth $80 million.
Harris Scarfe chief executive Robert Atkins said the buyout involved retailer Myer taking a 20 per cent stake in the business while the current Harris Scarfe management team would retain a 15 per cent interest.
Four Harris Scarfe stores also would be re-branded as Myer outlets: 2 in Adelaide (Colonnades and Elizabeth) and 2 in Victoria (Werribee and Forest Hill). [1] That would leave Harris Scarfe with 35 outlets in South Australia, NSW, Victoria, the ACT and Tasmania.
Mr Atkins said Momentum's investment would allow Harris Scarfe to retire about $30 million of debt, fuel profit growth and expand its network of stores.
It planned to open 15 new stores over the next 3 years including its first three outlets in Sydney.
The deal also would allow Harris Scarfe to move towards a share market listing in about three years, Mr Atkins said.
"Together with an active store roll-out plan, we envisage strong top-line sales growth and even faster profit growth in the years ahead," he said. "These are exciting times for Harris Scarfe. "This transaction better positions Harris Scarfe to further develop the business for the benefit of our customers, employees and shareholders."
Long term Harris Scarfe employee Lionel Penley wrote the history of Harris Scarfe, which the company published in 1991. This book tells the story of the growth of the business, and its close links to the development of South Australia's economy.
