A couple of the retail casualties of summer have been sorted out, it seems.
Last week it was failed Jeanswest being saved by Hong Kong-based investors, yesterday it was collapsed discount department store Harris Scarfe that is being taken over (subject to some final details being sorted out) by Australian investors.
Home fittings, fabric chain, Spotlight has won the right to acquire the business out of receivership. But more talks with landlords of Harris Scarfe will need to be completed in the next week for the deal to happen and around 1,300 jobs saved for the time being.
Harris Scarfe went into receivership and administration last December last year after a year of weak sales, low consumer confidence and weak trade.
In an effort to preserve the well-known brand, 21 stores were shut in early January as receivers at Deloitte looked for a buyer.
Late last month it was revealed that four parties were vying for the brand and its remaining 44 stores, and in a statement, on Tuesday it was revealed Spotlight Group had been granted exclusivity to purchase the business.
Spotlight Group is owned by rich listers Zac Fried and Morry Fraid. Besides Spotlight, they also operate the Anaconda and Mountain Design chains outdoor stores in Australia and New Zealand, along with a significant property portfolio. The two are also shareholders in the recently floated HomeCo, a real estate company.
Deloitte said the exclusivity was granted after a vigorous due diligence process which involved the shortlisting of four parties, and that Spotlight was “ideally suited” to ensuring future growth for Harris Scarfe.
The transaction is not locked in and will require further work between Deloitte and Spotlight, receiver Vaughan Strawbridge said in a statement. A finalised settlement could be complete by as early as mid-April.
“There is still a lot of work we need to do together to finalise the transaction and we will be working with the Spotlight Group and the Harris Scarfe leadership team to make this happen,” he said. in the statement.
“We are hopeful all of the 44 stores will be retained under the sale but ultimately, this will be dependent on how the transaction progresses over the next couple of weeks.”
Spotlight Group managing director Avi Gilboa told media that the company had been granted exclusive rights to negotiate the acquisition of Harris Scarfe but said landlord negotiations would need to be resolved next week if the deal was to go ahead. He indicated that is a major sticking point.
A total of 1300 staff are still employed by Harris Scarfe and Deloitte is seeking to ensure their ongoing employment.
