Mike Ashley’s Frasers Group is reportedly putting the finishing touches to a rescue deal for Harvey Nichols, which could see it acquire the store through a pre-pack administration.
Frasers is hoping to announce the acquisition as early as Thursday, following weeks of negotiations with FTI Consulting, which is advising Harvey Nichols and is lined up to act as administrator, according to Sky News.
The Sports Direct and Flannels owner is understood to have been discussing a series of commitments as part of the deal, including protecting jobs and settling outstanding payments owed to Harvey Nichols’ brand partners.
Frasers has reportedly considered offering a 12-month guarantee to retain the company’s London head office, although it remains unclear whether any employment commitments would extend across Harvey Nichols’ roughly 1,200 UK staff.
The retail group is also said to be prepared to pay money owed to suppliers, following concerns among some luxury brands about Ashley taking control of the business.
Supplier relations have been a particular focus following Frasers’ acquisition of Matchesfashion in 2024, which subsequently entered administration just months after the deal.
Frasers is understood to be prepared to acquire almost all of Harvey Nichols’ store estate, with its Dublin branch potentially the only exception. Rival bidder Next had also been pursuing the department store business during the sale process.
A successful deal would bring an end to 35 years of ownership by Sir Dickson Poon, whose family acquired Harvey Nichols in 1991. Advisers at FTI Consulting have been overseeing the sale process as the retailer battles mounting losses.
Ashley last week described Harvey Nichols as being in a “death spiral” and suggested he would be surprised if the business fetched more than £40m, given the investment required to turn it around.
Prospective buyers have previously been told they may need to inject up to £60m into Harvey Nichols to fund its transformation, although some industry sources believe substantially more could be required.
The luxury retailer has recorded five consecutive years of losses. Revenue fell 5% to £204.8m in the year to March 2024, while pre-tax losses widened to £34m.
If completed, the acquisition would add another high-profile name to Ashley’s retail empire, which has previously snapped up businesses including House of Fraser, Jack Wills and Gieves & Hawkes.
Click here to sign up to Retail Gazette‘s free daily email newsletter
