A major battle is emerging over the future of one of Britain’s best-known luxury department stores.
The latest bidder has already raised concerns among some of the brands that sell through the retailer.
Mike Ashley’s Frasers Group has entered the auction for Harvey Nichols after demanding access to the department store’s sale process, according to Sky News.
Harvey Nichols told suppliers on Tuesday that it was now “obliged” to allow Frasers to take part alongside other interested bidders, including Next.
In a memo sent to brand partners, a senior executive wrote: “As of yesterday, the situation has evolved and we are now obliged to allow Frasers Group to participate in the process alongside the other interested parties.”
The retailer said including Frasers would help ensure “a robust and competitive process” as it looks for the right owner to support its future growth.
However, some luxury brands are understood to have concerns about the prospect of a takeover by Mr Ashley’s retail group.
It remains unclear why Harvey Nichols was required to admit Frasers to the auction, given the department store is privately owned.
Mike Ashley is among the contenders to buy the club | PA
The retailer has belonged to the family of Sir Dickson Poon since 1991. He has now stepped down from the Harvey Nichols board and his other European directorships.
The company has struggled financially in recent years, recording losses for five consecutive years. In its most recently published accounts, covering the year to 31 March 2024, turnover dropped 5 per cent to £204.8m while pre-tax losses climbed to £34m.
Fresh financial results are expected to be filed shortly.
The chain, immortalised by its appearances in the 1990s BBC comedy Absolutely Fabulous, traces its origins to 1831 when Anne Harvey and Ben Nichols established the business together.
Mike Ashley’s Frasers Group has entered the auction for Harvey Nichols
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Several luxury brands have expressed concern to Sky News about the prospect of Mr Ashley’s group acquiring the department store empire, which stocks hundreds of prestigious names including Armani Beauty, Balmain, Cartier, Max Mara and Polo Ralph Lauren.
Just two weeks ago, Harvey Nichols had been reassuring brand partners in direct conversations that Frasers would not be part of the sale discussions.
This came despite reports over the past two months that Frasers had been negotiating to purchase Harvey Nichols’ stores outside the capital.
Next has also expressed interest in the luxury chain, which would add another struggling retailer to its portfolio of acquisitions.
Sir Dickson’s family has engaged FTI Consulting to oversee the sale, with regional advisers also brought in to court wealthy buyers from the Gulf.
Harvey Nichols employs approximately 1,200 staff across the UK, operating stores in London, Leeds, Edinburgh, Manchester, Birmingham, Bristol and Dublin.
The company’s international footprint extends to Hong Kong, Dubai, Riyadh, Kuwait and Doha, while it also runs the OXO Tower Restaurant on London’s South Bank.
Chief executive Julia Goddard, who took the helm two years ago, has been working to chart a long-term strategy for the business.
Under her leadership, the company has invested millions in renovating its flagship Knightsbridge store and expanding its digital capabilities.
In its memo to suppliers on Tuesday, Harvey Nichols said it remained “encouraged by the level of interest in the business” from both UK and international parties.
