Frasers Group, the retail giant behind Sports Direct and majority-owned by Mike Ashley, has acquired luxury department store chain Harvey Nichols out of administration.
The rescue package arrived shortly after the iconic retailer suffered a £49 million annual loss and warned that it would need to “cease trading” within a year if it failed to secure new funding.
Victory over retail rivals
The takeover concluded an auction process where Frasers had to “battle retail rival Next to take control of the brand.” The deal encompasses the brand’s online operation, inventory and six main UK stores in London, Manchester, Birmingham, Bristol, Leeds and Edinburgh, securing jobs for over 1,000 employees.
International franchise stores will keep trading under existing licensing arrangements, though the famed OXO Tower restaurant in London was excluded and sold separately.
Major restructuring planned
Fraser Group intends to launch a comprehensive turnaround plan to stabilize the company. The parent company stated that “significant restructuring and integration of Harvey Nichols into the Frasers Group ecosystem will be required to create a sustainable business for the future “which will include reviews of store portfolios, management structures and operating costs.”
Leadership outlines long-term vision
Explaining the strategic move, Frasers Group chief executive Michael Murray stated that “Harvey Nichols is an iconic British institution with significant potential but it is clear meaningful change is needed.”
He emphasized that “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.
