Harvey Nichols stores under review after Frasers acquisition
Retail group Frasers completed the acquisition of the UK business of Harvey Nichols on August 13.
The group said it was taking over the whole Harvey Nichols UK portfolio of six stores, together with its online business, existing inventory and more than 1,000 employees.
It described Harvey Nichols as one of the UK’s most recognised luxury retailers, with a heritage of almost 200 years.
Harvey Nichols has stores in London, Birmingham, Manchester, Bristol, Leeds and Edinburgh. It stocks products from more than 800 premium and luxury brands, including Gucci, Moncler, Burberry, Prada and Dior. However, it has sustained substantial losses for a number of years and, according to commentators, had run out of “financial headroom”.
There are also Harvey Nichols stores that licensed partners run in the Middle East and Hong Kong. Frasers Group said these international franchise agreements form part of the transaction and that the international stores will continue trading under existing arrangements.
The situation regarding a store that Harvey Nichols runs in Dublin is different. Frasers said: “Certain assets located at the Dublin store, including stock and fixtures, have been acquired as part of the transaction. Discussions in relation to the business [in Dublin] are ongoing and Frasers continues to support the trading operations of the Dublin store.”
On making the announcement, Frasers said there will be a need for “significant restructuring” to turn Harvey Nichols into a sustainable business again. It made clear that this will include a wider review and rationalisation of the store portfolio, organisational structure, operating model and cost base.
Commenting on the acquisition, Frasers Group chief executive, Michael Murray, said: “Harvey Nichols is an iconic British institution with significant potential, but it is clear meaningful change is needed. The turnaround will require tough choices, and we are prepared to make those decisions, even if that means a smaller business in the near term, to create a stronger and more sustainable Harvey Nichols for the long term.”
Image shows the Harvey Nichols flagship store in Knightsbridge in London.
Credit: Wikipedia/Ell Brown.
