Electrical goods and furniture retailer Harvey Norman this afternoon started laying off employees as it moves to shutdown down under performing Clive Peeters and Rick Hart Stores. Up to 100 staff could be out of work due to the Harvey Norman restructuring.

Harvey Norman said in a statement to the ASX that it will scrap the troubled Clive Peeters brand because of poor performance. The said stores will be retained but rebranded Harvey Norman.

Seven of the stores, in Victoria and Western Australia, would be permanently shut down, with the other 16 to remain open as Harvey Norman or Joyce Mayne stores.

The store closures would result in a charge of $10 million against next year's pre-tax profit, Harvey Norman said.

Patersons Securities retail analyst Russell Wright told the Sydney Morning Herald Harvey’s action is merely the best way of fixing a “bad mistake."

"It is easy to argue that Harvey Norman never conducted appropriate due diligence on this acquisition," he said.