Australian luxury fashion retailer Harrolds has entered liquidation after nearly four decades in the industry, owing millions to creditors.
This follows the liquidation of four entities associated with the company: Harrolds Logistics, JTP Sydney, Harrolds Femme, and Nelson River International at the beginning of this month.
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In July this year, Harrolds said that it would close its Sydney and Melbourne stores as part of its transformation plan.
SMB Advisory, the appointed liquidator, provided a statement to 9News indicating that the retail sector’s difficulties in the post-pandemic economy led to the collapse.
The news agency quoted SMB Advisory as saying: “The decision to appoint a liquidator to the companies comes after significant efforts to navigate the post-Covid retail landscape, which has presented unprecedented challenges for businesses across the sector.
“Despite best efforts to adapt to the evolving economic environment, reduced luxury spending, decreased foot traffic, and unfavourable government policies have significantly impacted operations.”
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By GlobalDataHarrolds owes more than $12m to creditors, 9News reported. citing a statement provided by SMB Advisory.
A report from news.com.au suggests the debt to be $16m, which is owed to nearly 90 creditors, according to an initial document submitted to creditors by the liquidator and filed with the Australian Securities and Investments Commission (ASIC).
Creditors affected by the liquidation include a company owned by Victoria Beckham, which is owed $30,000; two of Tom Ford’s companies, which have a combined debt of $33,000; and American designer Thom Browne, who faces a notable debt of $253,000.
Employees are also being impacted, with more than $190,000 in entitlements owed.
Meanwhile, Ross Poulakis, Harrolds’ founder, expressed deep regret and called the liquidation a “difficult decision”.
Additionally, the Australian Taxation Office is owed more than $2.3m, according to the ASIC document.
Poulakis was quoted by news.com.au as saying: “Despite our best efforts to adapt to the evolving economic environment, a combination of reduced luxury spending, decreased foot traffic, unprecedentedly high levels of CBD [central business district] office vacancies and extremely unfavourable government policies has significantly impacted our ability to sustain operations.”
