Source: Sharecast
Frasers, which did not disclose any financial details, said the deal includes Harvey Nichols' portfolio of six stores including the newly refurbished Knightsbridge London flagship, Manchester, Birmingham, Bristol, Leeds, and Edinburgh, together with its online business, existing inventory and over 1,000 employees.
Harvey Nichols' international franchise agreements form part of the transaction and international franchise stores will continue trading under existing licensing arrangements.
Frasers said certain assets located at the Dublin store including stock and store fixtures have also been bought as part of the deal. "Discussions in relation to the business are ongoing and Frasers continues to support the trading operations of the Dublin store," it said.
The deal excludes the OXO restaurant, which has been sold to another buyer.
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.
"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."
Frasers already owns House of Fraser, Sports Direct, Flannels and Jack Wills, among others.
Frasers shares closed up 1.6% at 817.50p.
Russ Mould, investment director at AJ Bell, said: "Frasers may have made its name in the ‘pile ‘em high, sell ‘em cheap’ end of the retail spectrum, but the company’s acquisition of Harvey Nichols is the latest sign it is setting its sights rather higher these days.
"Where the deal doesn’t represent a departure from the company’s longstanding MO is its eye for potential bargains under Mike Ashley, as well as its strategy of targeting brands and businesses when they’re down on their luck. The world of department stores has been shaken to its foundations by the emergence of e-commerce and rapidly rising costs over the last decade or more. Harvey Nichols has been no exception.
"Turning the business around while still retaining the integrity of the brand will be the challenge for its new owner. The acquisition adds to Frasers’ burgeoning portfolio of high-end retail chains and luxury brands which includes Flannels, The Webster and House of Fraser alongside stakes in Hugo Boss, Burberry and Mulberry.
"Investors and other stakeholders will hope there is no repeat of Frasers’ brief ownership of online luxury retailer Matches in 2024, when it snapped up the business before placing it in administration just three months later."
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