Key facts
- Mike Ashley's Frasers Group is among the leading bidders for luxury department store Harvey Nichols.
- Harvey Nichols has been put up for sale by its current owner, Sir Dickson Poon's family, after years of losses.
- The department store has recorded five consecutive years of losses, with revenue falling 5% to £204.8 million in the last fiscal year.
- Ashley described the business as being in a "death spiral" and a "huge challenge" to revive.
- Next is also a key bidder, and other potential buyers have explored offers.
- Some luxury brands stocked by Harvey Nichols have voiced concerns about a potential acquisition by Frasers Group.
Mike Ashley's Frasers Group has emerged as a leading contender in the race to acquire the struggling luxury department store Harvey Nichols. The billionaire founder of Sports Direct has indicated his interest, describing the business as being in a "death spiral" and a "huge challenge" to turn around.
Harvey Nichols has been put up for sale by the family of Sir Dickson Poon, who have owned the retailer for 35 years. The company has recorded five consecutive years of losses, with its most recent accounts showing a 5% drop in turnover to £204.8 million and pre-tax losses climbing to £34 million for the year ending March 31, 2024. Ashley expects the sale price to be less than £40 million, acknowledging that significant additional funding would be required for its transformation.
Frasers Group is reportedly competing with fashion giant Next for the acquisition. Other potential bidders, including Gordon Brothers, Chalhoub Group, and Reliance Retail, have also explored offers. Harvey Nichols has informed suppliers that Frasers Group must be allowed to participate in the auction process to ensure a robust and competitive sale. However, some luxury brands stocked by the department store have expressed concerns about a potential takeover by Ashley's retail empire.
Ashley suggested that Frasers Group might be willing to "overpay" for Harvey Nichols due to its perceived fit with his existing portfolio, which includes House of Fraser and Flannels. He noted that even established retailers like John Lewis are facing difficulties, underscoring the challenging retail environment. If successful, Ashley indicated a desire to keep the flagship Knightsbridge store and the Edinburgh branch trading under the Harvey Nichols brand, while other locations might be rebranded.