Harvey Nichols has warned that its future is at risk without a rescue deal, as Mike Ashley’s Frasers Group closes in on a takeover deal.
Newly filed accounts for Harvey Nichols Group, covering the year to 29 March 2025 and filed at Companies House on Friday, were prepared on a non-going-concern basis amid uncertainty over its future.
However Frasers Group has emerged as the frontrunner to acquire Harvey Nichols from its long-standing owner Sir Dickson Poon, with a deal potentially being completed through a pre-pack administration process.
The transaction could see the business briefly enter administration before being sold to Frasers, according to Sky News.
Next has also been competing to acquire Harvey Nichols, although sources close to the sale process indicated Frasers was now in pole position and that a rival bid was unlikely to overtake it.
A sale would bring an end to 35 years of ownership by Poon’s family, which acquired Harvey Nichols in 1991. Advisers at FTI Consulting have been overseeing the sale process.
The business has struggled with mounting losses in recent years. Its latest previously available trading figures showed revenue fell five per cent to £204.8m in the year to March 2024, while pre-tax losses widened to £34m. Harvey Nichols has now recorded five consecutive years of losses.
Prospective buyers have also reportedly been told they could need to commit as much as £60m to fund the retailer’s turnaround, although industry sources believe substantially more investment may ultimately be required.
Ashley last week described Harvey Nichols as being in a “death spiral” and said turning around the department store would represent a “huge challenge”. He suggested the business could ultimately change hands for less than £40m.
The uncertainty has raised questions over the future of Harvey Nichols’ approximately 1,200 employees and its UK store estate, which includes its flagship Knightsbridge department store as well as locations in Leeds and Edinburgh.
Harvey Nichols has been investing in a revamp of its Knightsbridge flagship as it looks to revive the business under chief executive Julia Goddard, but a rescue deal now appears increasingly critical to securing the retailer’s future.
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