Harvey Nichols has warned it could collapse without a rescue deal, with Frasers Group reportedly leading the race to buy the loss-making luxury department store.
Accounts filed at Companies House on 7 August for the year ended 29 March 2025 were drawn on a “non-going-concern basis”, meaning the Harvey Nichols Directors have concluded that the department store is unlikely to continue trading as a normal, functioning business within the next 12 months.
Reportedly Frasers could complete a takeover through a pre-pack administration, which would see Harvey Nichols briefly enter administration before its business and assets were sold to the retail group.
No agreement has been confirmed so far. NEXT has also competed for the business, although sources close to the process indicated that Frasers was leading and unlikely to be overtaken by a rival offer.
The uncertainty threatens about 1,200 UK jobs and Harvey Nichols’ seven stores in the UK and Ireland. Its estate includes the Knightsbridge flagship, four large regional locations and smaller-format stores in Bristol and Dublin.
Five years of losses increase funding pressure
The department store has now logged five straight years of losses. In the year to March 2025, turnover dropped 11% to £69.4 million, down from £78.1 million, while operating losses widened to £177.9 million, compared to £14.4 million the year before.
Loss after tax rose to £177.6 million, increasing from £12.9 million the year before.
Mike Ashley, the founder of Sports Direct and a major Frasers shareholder, called reviving the retailer a “huge challenge”. Speaking to the Financial Times, Ashley said: “If it was a little bit tough before, it is in a death spiral now”.
Ashley added that he thinks Harvey Nichols will sell for less than £40 million. That figure would not include the cash needed to support its recovery, with prospective buyers previously told to make between £50 million and £60 million available over the medium term.
The funding ask covers refurbishment of the Edinburgh store, international expansion, digital development and management’s broader business plan.
Frasers leads a contested sale process
Sir Dickson Poon’s family brought in FTI Consulting in June to handle a possible sale after 35 years of ownership. Gordon Brothers joined the auction, while Dubai-based Chalhoub Group and India’s Reliance Retail also examined potential offers.
Frasers, owner of Flannels and House of Fraser, joined the Harvey Nichols process in July. Some luxury suppliers raised concerns about its involvement, while Harvey Nichols said letting the group in would help maintain a competitive process.
Ashley told the FT that Frasers could bid more than NEXT because Harvey Nichols fits its existing portfolio. However, he indicated that neither bidder would be deeply disappointed if it lost the auction, given the expected cost of the turnaround.
Chief Executive Julia Goddard, who joined in June 2024, has overseen investment in the Knightsbridge flagship. Recent work includes a fourth-floor wellness destination and a redesigned ground floor for jewellery, lifestyle products and flexible brand spaces.
Meanwhile, the retailer recently strengthened its senior leadership team with the appointment of Shaun Donnelly to Buying Director for Non Apparel & Menswear.
Ownership history
Sir Dickson Poon’s Dickson Concepts International bought Harvey Nichols from Burton Group in 1991 for £53 million. The company listed on the London Stock Exchange in 1996 before being taken private again six years later.
Sir Dickson is no longer actively involved in running the group, having stepped down from the Harvey Nichols board and his other European directorships.
In June last year, TheIndustry.fashion took an in-depth look at Harvey Nichols’ transformation plans, featuring exclusive commentary on the challenges it faces and expert insights into how it might successfully navigate its transformation.