Harvey Nichols bidders asked to commit up to £60 million for turnaround

Bidders for Harvey Nichols have been asked to commit between £50 million and £60 million over the medium term to fund the luxury department store's transformation plan, Sky News reported.

The proposed investment, which would be separate from the acquisition price, would support a refurbishment of the Edinburgh store, international expansion, digital development and the management team’s business plan.

Potential bidders currently include Frasers Group and Modella Capital, the owner of Hobbycraft and TGJones, as well as Dubai-based Chalhoub Group and India’s Reliance Retail. 

Indicative offers have reportedly been received from UK bidders, while international bidders are working to a different timetable. 

Sir Dickson Poon’s family, which owns Harvey Nichols, has appointed FTI Consulting to advise on the sale and regional advisers to attract interest from potential Gulf-based buyers.

NEXT and Frasers join the auction

NEXT emerged as a potential bidder earlier in July, with sources saying the retailer intended to examine the business closely. It remains unclear whether NEXT would retain Harvey Nichols’ regional store network or focus on the brand and its intellectual property.

Frasers Group then entered the process two weeks ago, despite concerns among some Harvey Nichols suppliers about its potential ownership. Frasers owns Sports Direct, Flannels and House of Fraser.

A Harvey Nichols executive told suppliers at the time that the company was “obliged to allow Frasers Group to participate in the process alongside the other interested parties”. The memo said its admission was intended to ensure a competitive process and find the right partner for the retailer’s next phase.

Harvey Nichols stocks hundreds of luxury labels. Supplier concerns have focused on whether a new owner would maintain its market positioning and existing brand relationships.

Investment builds on the Knightsbridge revamp

The requested funding would extend a three-year transformation programme led by Chief Executive Julia Goddard, who joined Harvey Nichols in June 2024. The strategy has refocused the business on fashion, beauty and hospitality while reducing non-core operations.

The department store has also continued to reshape its commercial leadership, including the promotion of Shaun Donnelly to Buying Director for Non-Apparel and Menswear.

The retailer has already invested in its Knightsbridge flagship, including a fourth-floor wellness destination and a redesigned ground floor focused on jewellery, lifestyle products and flexible brand spaces. Its wider retail revival plan has also included digital investment and the addition of new fashion brands.

For the year to 31 March 2024, Harvey Nichols posted revenue of £204.8 million, a 5% decline, while pre-tax losses increased to £34 million. That marked the group’s fifth consecutive annual loss.

The business has about 1,200 employees in the UK and runs seven stores in the UK and Ireland, with large-format sites in London, Edinburgh, Birmingham, Leeds and Manchester, plus smaller-format branches in Bristol and Dublin.

Internationally, it operates six large-format stores in Riyadh, Doha, Dubai, Hong Kong and Kuwait.

The softer luxury goods market, together with the ending of VAT-free shopping for tourists after Brexit, has been pointed to as a major reason for the prolonged losses.

Sir Dickson’s Dickson Concepts International acquired Harvey Nichols from Burton Group for £53 million in 1991. The retailer now operates seven stores across the UK and Ireland alongside an international network in the Middle East and Asia.