Department store chain Harris Scarfe has become the latest high-profile casualty in the increasingly severe retail downturn.

Key points: Harris Scarfe is the latest in a long line of retailers including Bardot, Dimmy's, Roger David, Napoleon Perdis and Karen Millen to collapse recently

Harris Scarfe is the latest in a long line of retailers including Bardot, Dimmy's, Roger David, Napoleon Perdis and Karen Millen to collapse recently Retailers are experiencing the toughest conditions since the GFC

Retailers are experiencing the toughest conditions since the GFC Receivers Deloitte says Harris Scarfe's 1,800 staff will be paid over Christmas and gift cards and lay-bys will be honoured

The retailer has 66 stores across the nation — mainly located in Victoria, South Australia and Tasmania —and employs more than 1,800 staff with annual sales of $380 million.

Receivers Deloitte Restructuring Services said the business will trade as normal over the Christmas period, with staff continuing to be paid and gift cards and lay-bys honoured.

The company was acquired by private equity firm Allegro Funds only last month.

Deloitte said in a statement it had been appointed by a secured lender to the group.

Deloitte partner Vaughan Strawbridge said he was confident there were more than enough assets to meet all employees' entitlements.

"The receivers intend to achieve a sale of the business as a going concern and preserve the employment of as many people as possible," Mr Strawbridge said.

"Harris Scarfe is a longstanding retail institution. We will be making every effort to secure a future for the business and intend to commence an immediate sale-of-business process."

Retail collapses mounting

Harris Scarfe is by far the biggest outfit in a growing list of retailers that have collapsed in the midst of the most severe downturn in the sector since the global financial crisis.

Last month, fashion chain Bardot called in the receivers. Dimmeys with its 30 stores nationwide, raised the white flag two weeks ago, and is now in the process of clearing stock through a closing down sale.

Other high-profile businesses that have either gone into administration or receivership recently include fashion stores Karen Millen, Ed Harry and Roger David, footwear retailer Shoes of Prey and Napoleon Perdis Cosmetics.

Harris Scarfe's retail efforts focus on bed linen, kitchenware, homewares, electrical appliances and apparel, competing in the same space as the likes of Woolworths' Big W chain, as well as Target and Kmart, owned by Wesfarmers.

The dire situation in retailing was underscored in recent GDP figures that showed consumer spending growth was now at its weakest level since the depths of the global financial crisis a decade ago.

Consumer sentiment has been overwhelmingly pessimistic for the past six months according to the respected Westpac/Melbourne Institute survey.

Retail's 'reality apocalypse'

But Jana Bowden, an associate professor of marketing at Macquarie University, said Harris Scarfe's woes extend well beyond the general reluctance of consumers to spend.

"It hasn't focused on delivering an outstanding or memorable consumer experience," she argued.

"Instead, it delivered a mundane, and utilitarian offering of discounted product, supported by skeletal staffing, and a parallel lack of service."

However, she said Harris Scarfe's struggles were not unique in the retail sector.

"The sector is not facing a retail apocalypse, but it is facing a reality apocalypse," Associate Professor Bowden added.

"The sector has yet to recognise and acknowledge the real underlying cause of decline (amongst the other oft quoted issues) — a total lack of consumer engagement and an inadequate understanding of consumer needs and expectations."

Long history of near-death experiences

Harris Scarfe traces its origins back to a single store opened in Adelaide in 1849.

It is not the first time Harris Scarfe has run into trouble. It was also placed into receivership in the late 1990s having racked up debts of around $200 million.

Since then it has been owned by a series of private equity firms from Sydney to South Africa.

Last month Greenlit Brands agreed to sell a number of its retail assets, including Harris Scarfe and Best & Less, to another Sydney-based private equity business, Allegro Funds.

Greenlit still owns brands such as Freedom, Fantastic Furniture and Snooze.