Luxury fashion empire Harrolds crumbles with millions in debt

The world of high fashion is often seen as a realm of timeless elegance and enduring success.

Yet, even the most prestigious brands are not immune to the harsh realities of the retail industry.

In a stunning turn of events, an iconic Australian luxury fashion retailer has collapsed and left a trail of debt and uncertainty.


Harrolds, a name synonymous with opulence and style, has been a fixture in the Australian fashion landscape for nearly four decades.

Founded in 1985, the family-owned business opened its first store in Melbourne and quickly became the home for brands such as Tom Ford, Saint Laurent, Balmain, and Burberry.

Harrolds carved out a niche as Australia's only privately owned luxury department store, with additional stores in Sydney and the Gold Coast.


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Harrolds' flagship store storefront in Melbourne. Image Credit: Landini Associates/Trevor Mein


In an effort to adapt to the changing retail environment, Harrolds expanded its reach by launching an online store in 2020.

The online store boasted a collection from over 100 of the world's finest designer brands.

Despite its rich history, Harrolds has been quietly placed into liquidation earlier this month.


Liquidators from SMB Advisory revealed Harrolds’ staggering debt of more than $16 million owed to almost 90 creditors.

The list included outstanding debts to Victoria Beckham's company, two Tom Ford subsidiaries, American designer Thom Browne, Versace, and Stella McCartney, among others.

Harrolds' Managing Director, Ross Poulakis, expressed 'deep regret' over the decision.

'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 office vacancies and extremely unfavourable government policies has significantly impacted our ability to sustain operations,' Mr Poulakis shared in a statement.

'Unfortunately, the retail sector in Australia has been hit hard. Like many other retailers before us in this period, we have had to close our doors.'

The impact of Harrolds' downfall extended beyond the fashion labels.


Harrolds also owed their employees more than $190,000 in entitlements.

Various designers and luxury brands, including Feng Chen Wang, Mach & Mach, and Raffaele Caruso, were also left with unpaid bills.

The retailer also owed $2.3 million to one of its major creditors, The Australian Taxation Office (ATO).

Harrolds' closure marked the end of an era for luxury fashion in Australia. It also raised questions about the future of luxury retail in The Land Down Under.

For former employees and creditors, the path forward is uncertain.

SMB Advisory encouraged everyone affected by the liquidation to come forward and lodge claims.

As we witness the fall of Harrolds, it's a stark reminder that brands—no matter how luxurious or well-established—are not guaranteed survival in the volatile world of retail.
Key Takeaways

  • Australian luxury fashion retailer Harrolds recently went into liquidation and owed $16 million to multiple creditors.
  • Harrolds, founded in 1985, was Australia's only privately owned luxury department store and had outlets in Melbourne, Sydney, and the Gold Coast.
  • The company accrued debt with a number of famous design houses, including Victoria Beckham, Tom Ford, Thom Browne, Versace, and Stella McCartney, among others.
  • The liquidation also affected employees and nearly 90 creditors, including the Australian Taxation Office, to which the company owed over $2.3 million.
Have you shopped at Harrolds before? What do you think this means for the future of luxury shopping in Australia? Join the conversation and share your thoughts with us in the comments section below.
 
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Anything to do with Harrolds of UK????? Only one I've ever heard of.
And it's about time Australia STOPPED letting companies get into this type of debt as it's the workers and other business that pay for it in the end.

The knock-on effect of this will be felt for many more months or years.
Are you actually thinking of Harrods?
 
I have never seen the Aussie stores, but in the distant past I bought quite a few special things from Harrods in London. Most of them I still have. Hats, jewellery, fountain pens, clothing, luggage, all best quality but surprisingly reasonable prices. I’m not a keen shopper. I get the best I can afford and hang on to it. Whether from economic hardship or personal preference, in Australia we seem to like cheap and chinese for everything now.
These shops have certainly got nothing to do with Harrods in London. 😁
 
It's the rent and labour costs that drive a business under..... the landlords are unscrupulous.....they want their money.... then there is the agent dee and it pays them to drive up rents as they get paid a %... so the higher the rents the higher the commission... there is a sucker out there who has no idea about business and is just waiting to be fleeced.
I used to work in Centre Management for a shopping centre. I know how it works.
 
Same as the David Jones Sydney store. I would cut through it after work and would be completely empty whereas the myers store city was always busy
Same here I used to love walking through d.j.s store in melb just window shopping of course as they were so expensive compared to Myers, but gee they had some beautiful stuff.😊 Oh and getting squirted with expensive perfume was good too.
 
Anything to do with Harrolds of UK????? Only one I've ever heard of.
And it's about time Australia STOPPED letting companies get into this type of debt as it's the workers and other business that pay for it in the end.

The knock-on effect of this will be felt for many more months or years.
I think you might mean Harrods which are no relation to Harrolds who frankly I have never heard of. I did do some shopping in Harrods of London many years ago and was very happy with my purchase of a box of matches using my Diners card to pay for them!
 
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Unfortunately, businesses of all sizes will keep shutting down, with Victoria being the hardest hit among Australian states. In my opinion, as long as 'The Big Build Continues' and the Labor government stays in power, we may see more bankruptcies, families losing their homes, and tragically, even suicides. Keep your spirits up, Victorians!
 
It's the rent and labour costs that drive a business under..... the landlords are unscrupulous.....they want their money.... then there is the agent dee and it pays them to drive up rents as they get paid a %... so the higher the rents the higher the commission... there is a sucker out there who has no idea about business and is just waiting to be fleeced.
What drives businesses under is bad management decisions. They know from the outset what their costs are and are able to project their costs for a number of years. They can control their profit margins and build in projections for possible unforeseen costs. Blaming other bodies for failure is not really correct. There are of course a few unforeseen circumstances but it all boils down to bad management.
My opinion is that Australia has now cleared out most bad management businesses and is now on the cusp of developing good to great new businesses that will have new and exciting futures. I hope I am still around for this and look forward to enjoying it.
 
Unfortunately, businesses of all sizes will keep shutting down, with Victoria being the hardest hit among Australian states. In my opinion, as long as 'The Big Build Continues' and the Labor government stays in power, we may see more bankruptcies, families losing their homes, and tragically, even suicides. Keep your spirits up, Victorians!
That's right! Not ONE small business went under during the Napthine government.

Be thankful for the Andrews/Allan government in giving the rent free rock you have been living under for the last 10 years! :ROFLMAO:
 
Anything to do with Harrolds of UK????? Only one I've ever heard of.
And it's about time Australia STOPPED letting companies get into this type of debt as it's the workers and other business that pay for it in the end.

The knock-on effect of this will be felt for many more months or years.
You may be think of the UK Harrods, totally different from these stores.
 
Same here I used to love walking through d.j.s store in melb just window shopping of course as they were so expensive compared to Myers, but gee they had some beautiful stuff.😊 Oh and getting squirted with expensive perfume was good too.
I would walk through Myers every morning on my way to work as I would grab a coffee from the food court and get the lift up to ground level which was myers perfume section.
I would spray a different perfume each morning. I said whichever one I saw lasted the longest I would buy. But after weeks and weeks I forgot which one I liked the most 🙃 😅
 
I would walk through Myers every morning on my way to work as I would grab a coffee from the food court and get the lift up to ground level which was myers perfume section.
I would spray a different perfume each morning. I said whichever one I saw lasted the longest I would buy. But after weeks and weeks I forgot which one I liked the most 🙃 😅
In other words, you never paid for perfume.... :ROFLMAO:
 

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