Frasers Group set to acquire Harvey Nichols in pre-pack rescue deal - Report

UK-based Frasers Group, led by retail billionaire Mike Ashley, is reportedly putting the finishing touches on a rescue deal to acquire luxury department store operator Harvey Nichols.

According to a report by Sky News, Frasers Group is expected to announce the acquisition through a pre-packaged insolvency process, following several weeks of negotiations.

Citing industry sources, the report added that Ashley’s team has been engaged in detailed discussions with FTI Consulting, Harvey Nichols’ adviser and standby administrator. The talks are understood to include potential commitments aimed at preserving jobs across the business. Frasers Group had considered providing a 12-month guarantee to retain Harvey Nichols’ London head office, although it remains unclear whether such a commitment would extend to all of the group’s approximately 1,200 UK-based employees.

Frasers reportedly reaches acquisition deal

Frasers Group is also reportedly prepared to settle outstanding payments owed to the department store’s brand partners. The move comes amid scrutiny following the group’s acquisition of luxury online retailer Matchesfashion in 2024.

Unlike rival bidder Next, Frasers Group is understood to be seeking to acquire Harvey Nichols’ entire UK store portfolio, with the possible exception of its Dublin outlet. Discussions over the future of the Irish store have continued in recent days.

If approved by the courts, the transaction would bring an end to 35 years of ownership by Hong Kong-based businessman Sir Dickson Poon.

Declining Revenue and Significant Impairment Charges

The potential pre-pack administration follows a recent filing by Harvey Nichols, which said the loss-making retailer had been put up for sale by Poon amid mounting financial pressures. Auditors KPMG had previously warned that Harvey Nichols could need to enter formal administration before a sale could be completed if additional funding was not secured.

In its most recent financial period, Harvey Nichols reported an 11 percent decline in turnover to 69.46 million pounds, compared with 78.17 million pounds for the 52-week period ended March 30, 2024.

The retailer recorded a net loss after tax of 177.63 million pounds, compared with a loss of 12.92 million pounds in the previous financial year. The sharp increase in losses was primarily attributed to a non-cash impairment charge of 169.07 million pounds relating to intercompany loans within its parent company, Broad Gain (UK) Limited.

Headquartered in London, Harvey Nichols operates its flagship Knightsbridge store, along with regional UK outlets in Bristol, Leeds and Manchester.