Harvey Nichols, the luxury department store founded in 1831, has issued a stark warning that it could cease trading within a year unless it secures a sale or additional funding. The retailer's Hong Kong-based owner, Sir Dickson Poon, put the store up for sale in June, and reports indicate that talks to sell part or all of the business are at an advanced stage.
Potential buyers and current status
According to Sky News, Mike Ashley's Frasers Group emerged as the frontrunner in the bidding process. Next was also involved in discussions but is understood to have withdrawn. The sale process comes as Harvey Nichols faces significant financial pressure, with its flagship Knightsbridge store experiencing declining sales.
Financial troubles and sales figures
Sales at the Knightsbridge store fell from £78.1 million in the 12 months to March 2024 to £69.4 million a year later, attributed to inflation, currency fluctuations, and the cost-of-living crisis. The wider group has not yet published accounts for the same period, leaving its overall financial performance unclear. Directors have warned that the group is at risk of running out of money.
Statements from the company and Mike Ashley
A spokesman for Harvey Nichols confirmed that the company "has received a number of bids and was actively pursuing one or more such bids with a view to concluding a transaction within the going concern period." He added that if a sale is not completed, additional funding would be required, but no such funding has been agreed. The accounts were filed on a non-going concern basis.
Mike Ashley, who last week described Harvey Nichols as being in a "death spiral," said he "wouldn't be crying a river" if Frasers' bid failed. He predicted the retailer would be sold for less than £40 million, a significant drop from the £53 million Sir Dickson paid for it in 1991.
Regional struggles and legacy
While the Knightsbridge flagship accounts for a large share of sales, regional outlets in Birmingham, Bristol, Edinburgh, Leeds, and Manchester have struggled, according to the Telegraph. Harvey Nichols became synonymous with luxury partly due to its mentions in the BBC sitcom Absolutely Fabulous.
