The owner of Sports Direct has purchased Harvey Nichols out of administration after the upmarket department store chain warned it could run out of money without an immediate injection of new funding. Mike Ashley’s Frasers Group confirmed on Thursday that it had acquired the chain, which is headquartered at its flagship store in Knightsbridge, for an undisclosed sum on the same day the business entered administration.
Industry sources indicated that the acquisition price was approximately £40 million. The business currently employs 1,200 staff members across 13 stores. These locations consist of five large department stores in London, Edinburgh, Birmingham, Leeds, and Manchester, a smaller site in Bristol, and international outlets in Dublin, Riyadh, Dubai, Doha, Kuwait, and two in Hong Kong.
Frasers Group has confirmed the acquisition of the London, Edinburgh, Birmingham, Leeds, Bristol, and Manchester stores. Regarding the Dublin shop, the company stated that discussions are ongoing, though it has already purchased specific stock and fixtures and “continues to support” trading at that location. The existing franchise agreements for the overseas stores will remain in effect under the new ownership.
The Harvey Nichols restaurant located in the Oxo Tower in London is not part of the deal and is being sold separately. FTI Consulting, acting as the administrator, noted that a sale was being finalized that would preserve 100 jobs and ensure the ongoing operation of that specific business unit.
In a formal statement, Frasers Group outlined its strategy: “Significant restructuring and integration of Harvey Nichols into the Frasers Group ecosystem will be required to create a sustainable business for the future, including a review and rationalisation of the store portfolio, organisational structure, operating model and cost base.”
The group has been aggressively building its interests in the luxury fashion sector through its Flannels chain and by acquiring large stakes in the German brand Hugo Boss and the British handbag maker Mulberry. This follows Frasers’ 2018 acquisition of the House of Fraser department store chain, which resulted in the closure of approximately 40 of its 60 stores.
Ashley, the controlling shareholder in Frasers, recently told the Financial Times that Harvey Nichols was in a “death spiral” and that turning the business around would be a “huge challenge.” He has indicated plans to retain the Knightsbridge and Edinburgh stores while potentially rebranding the Birmingham, Leeds, Manchester, and Bristol locations as House of Fraser or Flannels.
Veteran retail analyst Richard Hyman commented on the acquisition, stating: “We can be certain that Harvey Nichols won’t be the same, because being the way it was has racked up huge losses and that won’t be tolerated by Mike Ashley.” Hyman also teased the potential for further changes, noting: “Sports Direct might go well on that corner,” pointing to the former department store Lillywhites on London’s Piccadilly, which Ashley has owned for decades and now operates as a Sports Direct outlet.
The future of the Knightsbridge flagship remains a subject of speculation. It is unclear if Ashley intends to keep the entire site as a traditional retail and restaurant operation or if he will redevelop the space to incorporate other brands, such as gyms or hotels, to improve profitability. The Knightsbridge store first opened in 1889.
Harvey Nichols was founded in 1831 as a linen shop and became a symbol of 1990s chic, frequently appearing in the popular TV sitcom Absolutely Fabulous. The retailer was put up for sale by long-term owner Dickson Poon after failing to return to profit following the pandemic, which severely impacted the flow of big-spending foreign tourists.
In the last century, the chain was owned by the Burton Group before Poon purchased it in 1991 for £53 million and listed it on the London Stock Exchange in 1996. However, recent accounts revealed a loss after tax of £105 million for the year ending 29 March 2025, after writing off inter-company loans. Directors had previously warned the company was not a going concern, citing a lack of funding agreements.
Frasers Group chief executive Michael Murray, who is Ashley’s son-in-law, stated: “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.”
Julia Goddard, chief executive of Harvey Nichols, added: “I look forward to working closely with Frasers Group to build on the momentum already under way.” Lindsay Hallam, senior managing director at FTI Consulting, confirmed that the deal secures more than 1,000 jobs and provides a stable platform for the company’s future operations. The report also notes that which has 1,200 employees and 13 stores, sources said he had paid about £40m for Harvey Nichols. The report also notes that according to accounts published over the weekend, it reported a loss after tax of £105m after writing off inter-company loans for the year to 29 March 2025. The report also notes that so Ashley’s bid was seen as more attractive, the FTSE 100 retailer Next had been interested in taking over the business but sources said it wanted only one or two of Harvey Nichols’s stores. The report also notes that while its aspirational shoppers’ budgets have come under pressure from the cost of living crisis, in recent years the business has suffered from increased competition from Harrods and Selfridges as well as a host of online players.
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