Image source, James Willoughby/SOPA Images/LightRocket via Getty ImagesByYasmin RufoBusiness reporter
Luxury department store Harvey Nichols has been bought by the owners of Sports Direct, who warn “significant restructuring” will be needed to ensure the 200-year-old business remains sustainable.
Mike Ashley’s Frasers Group will take control of the Harvey Nichols stores, including its flagship in Knightsbridge, as well as the international franchise.
The department store was immortalised in BBC sitcom Absolutely Fabulous, but had faced challenges in recent years. The firm had appointed administrators in June.
Frasers Group’s chief executive Michael Murray called the store a “British institution with significant potential” but added “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,” he said.
Harvey Nichols carries more than 800 premium and luxury brands and has over 1,000 employees. Its other stores are located in Manchester, Birmingham, Bristol, Leeds and Edinburgh.
Frasers Group will also acquire the online business, and stores will continue to operate under their existing licensing.
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.
It had faced “sustained trading and operational challenges” recently and Frasers Group said it will need to conduct a review of the store’s portfolio, structure and cost base.
A recent auction for the store saw Frasers battle retail rival Next to take control of it.
Harvey Nichols chief executive Julia Goddard said today marked “an important milestone” for the company and “provides a strong platform for the next phase of the business’s evolution”.
“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,” she added.
Lindsay Hallam, senior managing director of administrator FTI Consulting, who advised Frasers Group on the sale, said she was “pleased to have secured a buyer, providing continuity for Harvey Nichols and enabling it to move forward under new ownership”.
“We are particularly pleased the transaction secures more than 1,000 jobs and provides a strong platform for its next chapter.
“Our focus was to find a solution that protected the underlying value of the business, securing a future for a 200-year-old retailer, and delivering the best possible outcome for stakeholders”.
Harvey Nichols’s restaurant in the Oxo Tower, London is being sold off separately and is not included in the deal.
Frasers Group owns several high street retail chains and luxury fashion brands including Sports Direct, Flannels, Jack Wills and House of Fraser.