Frasers Group (LON: FRAS), the retail and property group behind Sports Direct, House of Fraser and FLANNELS, has bought stricken department store chain Harvey Nichols out of administration. Shares rose further in early trade today after the deal was confirmed yesterday.
FRAS traded at 829.5p in early dealing today, up 1.47% from yesterday’s close of 817.5p, and near the top of its 52-week range of 598p to 840p. The stock has climbed roughly 27% over the past three months.
Frasers beat rival bidder Next (LON: NXT) to acquire Harvey Nichols through a pre-pack administration, a pre-arranged insolvency sale agreed before the company formally entered administration. The deal covers all six UK stores, the online business, product inventory and international franchise agreements, deals letting overseas partners run Harvey Nichols-branded stores under licence, and preserves more than 1,000 jobs. The Dublin store and the OXO Tower Restaurant are excluded. Frasers Group 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.”
Harvey Nichols had warned it could cease trading without a buyer after posting a £48.7m after-tax loss in the year to March 2025 on sales down 10% to £184.8m, its fifth consecutive annual loss. The purchase price was not disclosed, leaving the deal’s near-term contribution to Frasers’ earnings unclear, and underlining why the market’s reaction reflects confidence in Mike Ashley’s dealmaking rather than any immediate profit boost from a loss-making business.
The deal fits Frasers’ “elevation strategy,” its push further into premium and luxury retail alongside its other upmarket brands.
Frasers has now added another distressed luxury name to a stable built on buying troubled retailers cheaply, but Murray’s own words point to a smaller Harvey Nichols before it can grow again.