Harvey Nichols bought by Mike Ashley's Frasers Group
The deal includes the business' six stores and website
Last updated 3 hours ago
Mike Ashley’s Frasers Group has bought Harvey Nichols after the struggling department store chain fell into administration.
Bosses at Sports Direct owner Frasers said they will now oversee a turnaround at the historic chain, which could see it become a “smaller business” in the short-term.
Frasers will now oversee a “significant restructuring” as it integrates Harvey Nichols into its wider group, with plans to review the retailer’s shop portfolio, organisation structure, operating model and costs.
It comes after an auction process for Harvey Nichols which saw Frasers battle retail rival Next to take control of the brand.
Earlier this week, Harvey Nichols warned in its latest accounts that it would need to “cease trading” within a year if it failed to secure new investment.
The deal includes the brand’s estate of six stores in Knightsbridge London, Manchester, Birmingham, Bristol, Leeds and Edinburgh.
The rescue deal, which will secure the future of more than 1,000 workers, will also include Harvey Nichols’ online business and its product inventory.
Harvey Nichols’ international franchise stores will continue to trade as part of the deal.
However, the OXO restaurant launched by Harvey Nichols in 1996 at the OXO Tower building on London’s South Bank was not included and has been acquired by another buyer.
The takeover comes after the department store firm appointed administrators from advisory firm FTI.
It comes after a period of “sustained trading and operational challenges” at Harvey Nichols, which saw it slide to a £49 million loss for its latest financial year.
The company was bought by Hong Kong-based business magnate Sir Dickson Poon in 1991 but he put the group up for sale earlier this year.
The move by Frasers is part of the group’s so-called “elevation strategy” aimed at increasing its presence in the luxury sector, amid the growth of its Flannels brand.
In recent months, the company also launched a takeover approach for German fashion brand Hugo Boss, which it already owns a stake in.
Frasers Group’s chief executive Michael Murray said: “Harvey Nichols is an iconic British institution with significant potential, but it is clear meaningful change is needed.
“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.”
Harvey Nichols chief executive Julia Goddard 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.
“Over the past year, we have made significant progress in repositioning this iconic business, investing in our flagship store, broadening our customer proposition, and strengthening the brand DNA.
“I look forward to working closely with Frasers Group to build on the momentum already under way, driving sustainable growth through greater operational efficiency and enhanced infrastructure, and continued investment into customer experiences to ensure Harvey Nichols remains a distinct and relevant luxury destination for both our customers and brands.”