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Mike Ashley’s Frasers Group has bought struggling department store chain Harvey Nichols through a pre-pack administration that will further the high street group’s luxury ambitions.
The transaction, announced on Thursday, allows Frasers to buy a slimmed-down business shorn of some of its liabilities. The Sports Direct owner paid approximately £40mn, according to people with knowledge of the deal.
Frasers will acquire six stores, including Harvey Nichols’ flagship in Knightsbridge, London, as well as its online and international franchise businesses.
However, the retail group’s chief executive Michael Murray warned there would be a “significant” restructuring of Harvey Nichols as it integrated the business into Frasers following tough trading in recent years.
Frasers said there would be a review and rationalisation of Harvey Nichols’ store portfolio, organisational structure, operating model and cost base. The group is taking on more than 1,000 Harvey Nichols employees.
“Harvey Nichols is an iconic British institution with significant potential, but it is clear meaningful change is needed,” said Murray, Ashley’s son-in-law.
“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,” he added.
As part of the deal, Frasers will take ownership of Harvey Nichols stores in Edinburgh, Manchester, Birmingham, Leeds and Bristol. It is still in talks about the future of the Dublin store. The transaction excluded its famous London eatery, OXO Restaurant, which has been sold to another buyer, said administrators at FTI Consulting.
Frasers will add Harvey Nichols to a collection of multi-brand retailers that includes Flannels, The Webster and House of Fraser. The group has also built stakes in Hugo Boss, Burberry and Mulberry, which all supply its business.
The sale of Harvey Nichols ends Sir Dickson Poon’s 35-year ownership of the chain, which rose to prominence in the 1990s partly thanks to its association with the BBC sitcom Absolutely Fabulous.
Ashley told the FT last week that Harvey Nichols was in a “death spiral” and turning it around would be a “huge challenge”. Despite that, he still wanted to buy the business because he believed it would be a good fit with Frasers’ portfolio.
In the statement on Thursday, Frasers and Harvey Nichols said they were committed to “supporting” the chain’s suppliers and “maintaining these strong relationships” through the transition to new ownership.
The comments come in the wake of Frasers’ brief and chaotic ownership of online luxury retailer Matches Fashion, which it placed into administration in 2024, less than three months after buying the company.
Suppliers to Matches, including Gucci and Prada, are set to recover only around a penny for every pound they were owed when Matches collapsed. As secured creditor, Frasers recovered its entire investment.
Like many department store chains, Harvey Nichols has been under long-term pressure from the rise of ecommerce and higher costs. The group, which traces its history back nearly 200 years, has racked up cumulative pre-tax losses of £190mn over the past six years.
It blamed “weak consumer confidence” as well as the end of tax-free shopping for tourists for a 10 per cent decrease in revenue to £184.7mn in the year to the end of March 2025, according to accounts filed this month. It also warned that it would struggle to stay afloat without a cash injection.
Additional reporting by Ashley Armstrong
