luxury department store Harrolds.  Commenting on the demise of Matches earlier this year, co-founder Tom Chapman noted the rise of “promotional activity” after he and his wife, and fellow co-founder, Ruth Chapman, sold the business to private equity firm, Apax, in 2017. Apax then sold it to Mike Ashley’s Frasers Group last December, who placed the business in administration in March.  “I think, over a period of six years, that magic completely disappeared, the curation disappeared, as did the understanding of the consumer. They were paralyzed by fear and by performance anxiety, which resulted in massive promotional activity,” Chapman told WWD.  Meanwhile, Australian multibrand retailer Harrolds entered liquidation last month after exhausting every avenue to keep the business afloat following a perfect storm of unfavourable conditions. Harrolds Group’s managing director Ross Poulakis spoke openly about his experience of the process. Navigating liquidation Some of Poulakis’s earliest memories are working on the shop floor and in the warehouse. He joined the company in an official capacity in 2010, learning the back end of the business’s operations, before becoming MD a decade ago after his father’s retirement. “I’ve never been through a process like this. It’s traumatic, to say the least,” Poulakis told Inside Retail about the liquidation. “It’s a challenging time. This is a family business that’s been here for 39 years, in a second generation, I’ve grown up in this business my whole life, and it’s just gotten to the point where it just couldn’t continue.” Harrolds is still working with the liquidator, Poulakis said, and he doesn’t know “what’s next”. Contemplating what went wrong, he noted that “there’s always been downtimes in the market, and we’ve adjusted accordingly to do that”. But previously, the markets were different: “The cost of living, rents, and fixed costs weren’t so high, everything’s gone up,” he said. “Our margins started decreasing and our overheads became too big, the advice I’ve got for other retailers is making sure that you keep in line your overheads and make those decisions accordingly because you don’t want to be put in this situation, with no assistance from anyone and the government, that’s for sure, you’re on your own.” Cut price luxury While luxury brands like those owned by LVMH and Kering Group have the resources to adapt more quickly to market shifts and mitigate external factors like the ramifications of the global pandemic, multibrand retailers like Harrolds are more vulnerable sector shifts. “We were the fly annoying the elephant. Little guys just pushing, punching above our weight, taking calculated risks to try to grow our business to where it was,” Poulakis said. “We were pioneers of what we were doing within the Australian market, that’s something that I’m proud of, and what we’ve been able to achieve.” Harrolds started as a menswear retailer “that only sold suits” before it grew into a leading luxury fashion retailer “bringing the likes of Saint Laurent, Givenchy and Alexander McQueen to the market when no one else was doing it,” Poulakis said. While the retailer ventured online in 2020, Poulakis confirmed that it “closed the e-commerce side of things a number of months ago from an official trading capacity”. “E-commerce is a very, very tricky business within the luxury landscape. It’s not something that we loved, per se, because our business was based on an experience within the store, and the biggest challenge was always trying to offer this experience online,” Poulakis said. “Covid forced us to jump onto that train, but the luxury market within the e-commerce side has become a discount model,” he said. “Net-a-Porter, they’re always on sale, and businesses like Matches, which were absolute conglomerates in the industry worth billions [are] now being shut down as well,” he added. “Once you start to discount, the margins aren’t there and you’re losing out and with rents and everything so high, you just can’t make it work and that’s what’s gotten us to this point now,” Poulakis said. On top of this, he said, suppliers exerted pressure on Harrolds to buy a certain amount of stock, despite not having the foot traffic to come in to buy it. “We’re not a conglomerate where we have massive financial backing like the LVMH and the Kering Groups of the world. We’re a family business trying to compete against those guys, and we just couldn’t do it anymore.”