Harvey Nichols will collapse without rescue deal, directors warn
Harvey Nichols will collapse into administration if a rescue buyer is not found, directors of the luxury department store chain have warned.
The retail empire will “cease trading” if it fails to agree a sale and no additional funding is found, the group’s directors cautioned in its latest accounts.
Harvey Nichols could find a buyer as soon as this week as part of a high-profile auction process which has attracted the interest of high street giants Next and Frasers.
Frasers Group, which owns Sports Direct and Flannels, is leading the race to snap up the firm and could trigger a takeover through a pre-pack administration process in the coming days, Sky News has reported.
Frasers founder Mike Ashley is seeking acquisitions to drive his retail empire’s luxury push. Last week, he told the Financial Times that the department store chain is in a “death spiral”.
Harvey Nichols sales slow
“The group has received a number of bids and is actively pursuing one or more such bids with a view to concluding a transaction within the going concern period,” Harvey Nichols’s directors said in a Companies House report.
“While a range of offers has been received by the group, one or more such offer would require the group to be in formal administration prior to sale. At the date of approval of the financial statements, no offer has been accepted.”
The group posted a 10 per cent drop in revenue to £184.8m in the year to March 2025, blaming weakening consumer confidence and a drop-off in spending from international tourists.
If Harvey Nichols failed to find a buyer it would need to secure emergency funding or risk collapse within a year, the board said.
The department store’s potential buyers had been asked to commit between £50m and £60m to fuel the group’s turnaround efforts as part of any bid.
But Ashley told the Financial Times that he was hoping for a cut-price deal. Harvey Nichols will likely be sold for less than £40m, he said.
Ashley: Department store in ‘death spiral’
“I don’t think I’ll be writing a huge cheque, because you’ve got to think about the future losses. If it was a little bit tough before, it is in a death spiral now,” he said.
But Ashley said he “wouldn’t be crying a river” if Frasers missed out on the department store, adding: “I don’t think Next would be either.”
The FTSE 100 retailer has also been involved in the auction process. Under the leadership of Lord Simon Wolfson, Next has picked up a number of small up-market retailers in recent years, including Russell & Bromley and Joules.
Harvey Nicholls had its heyday in the 1990s and was a fixture in sitcom Absolutely Fabulous. But it has suffered from stiff competition from rivals like Harrods and Selfridges in recent years.
The group’s Hong Kong-based owner, retail tycoon Sir Dickson Poon, is looking for a buyer to upgrade its store estate and drive its international expansion.