Harvey Nichols has warned it could collapse within a year unless it secures a multimillion-pound bailout or is sold, with Mike Ashley's Frasers Group emerging as the frontrunner to acquire the department store chain.
The warning came in the company's latest accounts, filed on July 30, which revealed mounting losses for the fifth consecutive year. Revenue dropped five percent to £204.8 million in the year to March 2024, with losses attributed to inflation, the cost of living, and currency movements.
Potential sale process
According to Sky News, a deal could be done through a pre-pack administration process, where the sale of an insolvent company's business or assets is negotiated before an administrator is officially appointed. This could see Harvey Nichols briefly enter administration.
It is expected that Frasers Group could handpick Harvey Nichols stores rather than purchase the entire business, reports The Telegraph. Last week, Mr Ashley told the Financial Times that Harvey Nichols was "in a death spiral" and claimed he would be able to pay more than Next to acquire the brand.
Financial details
Potential buyers have been informed that £60 million is needed to be injected into the company to fund a turnaround. The sale process is being overseen by advisers at FTI Consulting.
Sir Dickson Poon's family have owned the chain for 35 years, with stores across the UK, including Leeds, Birmingham, Edinburgh, Manchester, and Bristol, as well as its Knightsbridge flagship.
