Frasers Group has acquired department store chain Harvey Nichols from FTI Consulting, the business consulting company that had been appointed administrator to oversee its sale.
Owned by billionaire Mike Ashley, the UK retail conglomerate has not confirmed the value of the transaction, though several media outlets have reported it to be £40m ($53.9m).
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Harvey Nichols had been struggling with trading and operational pressures for some time before the sale.
Harvey Nichols CEO Julia Goddard said: “Today marks an important milestone for Harvey Nichols and provides a strong platform for the next phase of the business’s evolution under the ownership of Frasers Group.”
The acquisition brings six UK stores into Frasers’ portfolio: the Knightsbridge flagship in London, which recently underwent refurbishment, together with outlets in Birmingham, Bristol, Edinburgh, Leeds and Manchester.
Harvey Nichols’ online operation, current stock and a workforce exceeding 1,000 are also part of the deal.
Beyond its UK sites in London, Edinburgh and Leeds, the department store chain operates internationally in Doha, Dubai, Hong Kong, Kuwait and Riyadh.
International franchise agreements have transferred as part of the acquisition, meaning franchise stores will keep operating under their present licensing terms.
Frasers has also taken on certain Dublin store assets in Ireland, such as stock and fixtures.
However, talks concerning the wider Dublin operation have not concluded, and Frasers says it is continuing to back the store while trading continues.
With this transaction, Dickson Poon’s 35-year ownership of the retailer comes to an end.
Harvey Nichols traces its origins to 1831, was floated on the London Stock Exchange in 1996, and later went back into private hands.
According to Frasers, bringing Harvey Nichols into the fold will involve “significant restructuring”, covering the store network, organisational setup, operating model and cost structure, as part of efforts to bring the retailer back to profitability.
In comments to the Financial Times last week, Ashley described Harvey Nichols as being in a “death spiral” and said turning the business around would be a “huge challenge”.
Senior leadership teams of the companies will collaborate on restructuring the business going forward.
Frasers CEO Michael Murray said: “By integrating Harvey Nichols into our existing luxury ecosystem, we believe Frasers Group can deliver the expertise, infrastructure and commitment needed to give the business the best chance of long-term success.”
