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 [...]
Harvey Nichols, a luxury department store chain, is facing potential collapse if a rescue deal cannot be secured, according to the company's directors. In its latest accounts, the group warned that it will cease trading if no buyer is found and additional funding is not secured. The department store is currently in the midst of a high-profile auction process, which has attracted the interest of major players such as Next and Frasers Group.
Frasers Group, led by billionaire Mike Ashley, is currently leading the race to acquire Harvey Nichols. Ashley, who owns Sports Direct and Flannels, is actively seeking acquisitions to bolster his retail empire's luxury push. Frasers Group could potentially trigger a takeover through a pre-pack administration process in the coming days.
The company has received multiple bids for its business, but none have been accepted yet. The directors stated that an offer would require the group to enter formal administration before the sale can take place. Harvey Nichols' turnover has declined by five percent to £46.6 million in the year to March 2025, while its pre-tax loss widened to over £14 million.
If the company fails to find a buyer, it may need to secure emergency funding or risk collapsing within a year. Frasers Group's founder, Mike Ashley, had previously described the department store chain as being in a "death spiral." Ashley expressed hope for a deal at a cut-price price, estimating the sale could be worth less than £40 million.
Next, another potential buyer, has also been involved in the auction process, with the FTSE 100 retailer having acquired several upscale retailers in recent years. Harvey Nichols, which had its peak in the 1990s, has struggled to compete with rivals like Harrods and Selfridges. The company's Hong Kong-based owner, Sir Dickson Poon, aims to upgrade its store estate and expand internationally.
Written by urgent.news from City AM's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.