Key facts
- Frasers Group has joined the race to acquire luxury department store Harvey Nichols.
- Next is considered a frontrunner in the sale process.
- Harvey Nichols' pre-tax losses widened to £35.3m in the year to March 30, 2024.
- Revenue for Harvey Nichols declined to £204.9m in the same period.
- Some luxury brands stocked by Harvey Nichols have expressed concerns about Frasers Group's potential ownership.
Luxury department store Harvey Nichols is facing a potential bidding war for its acquisition, with Mike Ashley's Frasers Group now participating in the sale process alongside other interested parties, including fashion retailer Next.
Harvey Nichols informed its brand partners that Frasers Group was obliged to be included in the auction, a development that has reportedly raised concerns among some luxury brands stocked by the retailer. This marks a significant twist in the sale of the company, which has been owned by Hong Kong businessman Sir Dickson Poon since 1991.
Next has emerged as one of the leading contenders, with other potential buyers from Turkey, Qatar, and the US also expressing interest. Formal bids are expected this week, managed by FTI Consulting and Derya Akyuz.
Frasers Group, which owns brands like Sports Direct and Flannels, has been actively expanding its footprint in the premium and luxury fashion market. The group has a history of acquiring stakes in companies and pushing for strategic changes or takeovers, though recent offers for Hugo Boss and Accent Group were rejected. Frasers had previously considered acquiring some of Harvey Nichols' regional stores without reaching a deal.
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Harvey Nichols has faced challenges in recent years due to weaker luxury demand, decreased footfall, and the removal of tax-free shopping for international visitors. Its pre-tax losses widened to £35.3 million in the year ending March 30, 2024, from £21.3 million the previous year, while revenue fell from £216.6 million to £204.9 million. Expansion into regional cities has also struggled to meet initial expectations.
Chief executive Julia Goddard is leading a turnaround effort, including a multimillion-pound refurbishment of the flagship Knightsbridge store and the introduction of approximately 75 new brands since October to refresh its offerings and attract shoppers. The store gained prominence in the 1990s, partly due to its appearance in the BBC comedy 'Absolutely Fabulous' and its popularity with high-profile customers.