British retail tycoon Mike Ashley's Frasers (FRAS.L) bought Harvey Nichols out of administration on Thursday, helping keep the struggling luxury department chain's stores open but noting the difficult road ahead to keep its operations sustainable.
Founded in 1831, Harvey Nichols has been loss-making for several years after its heyday in the 1990s and 2000s. While it remains a key luxury shopping destination, the deal is the latest in a string of British retail rescues by Ashley, who is known for buying businesses at bargain prices.
Frasers did not disclose how much it bought Harvey Nichols for, but the acquisition of the group, which sells luxury goods ranging from cosmetics and fashion to food and wine, ends 35 years of ownership under Hong Kong billionaire Dickson Poon.
Frasers said the integration of Harvey Nichols into its operations would require significant restructuring, which could include a review and rationalisation of the store portfolio, organisational structure, operating model and cost base.
"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," Frasers CEO Michael Murray said in a statement.
SERIAL ACQUIRER
Frasers has accelerated its acquisition-led strategy under Murray, which has expanded the sportswear and fashion retailer's global footprint but also cost it heavy goodwill writedowns.
It will buy Harvey Nichols' stores in London, Edinburgh and Leeds, its online business, existing inventory and take on more than 1,000 employees, as well as the retailer's international franchise agreements, but not the OXO Tower restaurant in London.
Frasers has built its retail empire through a string of acquisitions including House of Fraser, Evans Cycles, Sofa.com, while also seeking influence over rivals such as Debenhams(DEBS.L).
It failed with a takeover bid for Mulberry (MUL.L) in 2024, and is currently pursuing a hostile acquisition of German fashion house Hugo Boss (BOSSn.DE).
