Harvey Nichols SAVED from collapse as high end chain bought by Mike Ashley’s Frasers Group

HARVEY Nichols has been rescued from the brink of collapse after Mike Ashley’s Frasers Group swooped in to buy the struggling luxury department store chain. It comes just days after the retailer, which has been owned by Sir Dickson Poon’s family for 35 years, warned it could cease trading within a year unless it found a buyer or fresh funding. The acquisition includes Harvey Nichols’ six stores, its newly refurbished Knightsbridge flagship, and outlets in Manchester, Birmingham, Bristol, Leeds and Edinburgh. More than 1,000 staff will transfer as part of the deal, along with the firm’s online business, existing stock and international franchise agreements, but a major restructuring awaits. Sign up for the Money newsletter Thank you! Overseas franchise stores will continue trading as normal under existing licensing arrangements, while Frasers has confirmed it is continuing to support trading at the Dublin branch. Certain assets at the Dublin store, including stock and fixtures, have also been snapped up as part of the transaction. The OXO restaurant, based at the Knightsbridge store, is not included in the deal and has instead been sold to a separate buyer. The deal was struck through a pre-pack administration process, with FTI Consulting LLP appointed as administrators before the sale was agreed. A pre-pack deal is when a buyer for a struggling company is lined up in advance, with the sale going through as soon as administrators are officially appointed. It allows the business to keep trading with minimal disruption, rather than being forced to shut down while a buyer is found. Most read in Money Frasers Group said Harvey Nichols has faced “sustained trading and operational challenges” in recent years and admitted major restructuring lies ahead. The admission suggests that not all of Harvey Nichols’ six shops or its 1,000-plus workforce are guaranteed to survive the shake-up. Frasers Group has already conceded that creating “a sustainable business for the future” may mean a smaller Harvey Nichols in the short term. Michael Murray said Harvey Nichols was “an iconic British institution with significant potential” but insisted “meaningful change is needed”. He added: “The turnaround will require tough choices, and we are prepared to make those decisions, even if that means a smaller business in the near term, to create a stronger and more sustainable Harvey Nichols for the long term.” Mr Murray said integrating the chain into Frasers Group’s existing luxury operations would give it “the best chance of long-term success”. Harvey Nichols chief executive Julia Goddard said the takeover marked “an important milestone” for the retailer and its staff. She said: “Today marks an important milestone for Harvey Nichols and provides a strong platform for the next phase of the business’s evolution under the ownership of Frasers Group.” Ms Goddard praised her workforce, adding: “I am incredibly proud of what our teams have achieved and grateful for the commitment and resilience they have shown throughout this period of uncertainty.” The deal builds on Frasers Group’s so-called Elevation Strategy, which already includes upmarket names such as Flannels, The Webster and Hulcan’s Mile. It also strengthens Frasers’ ties with major luxury brands stocked by Harvey Nichols, including Gucci, Moncler, Burberry, Prada and Dior. Harvey Nichols had posted five consecutive years of losses, with revenue sliding five per cent to £204.8million in the year to March 2024. Bosses had blamed inflation, the cost of living squeeze and currency movements for the chain’s struggles, with Mr Ashley previously branding the situation a “death spiral”. Frasers Group has confirmed all acquired stores will continue trading “until further notice” as the retail giant begins reshaping the historic brand for the future. Comment now