Harvey Nichols bidders urged to commit £60m to turnaround plan | Money News

The pack of suitors interested in taking over Harvey Nichols, one of Britain’s best-known department store chains, have been asked to commit up to £60m of investment to fund its transformation.

Sky News understands that the bidders who have expressed an interest in the Knightsbridge-based group have been informed that between £50m and £60m is required over the medium term to deliver its management team’s business plan.

The money would be used for a refurbishment of Harvey Nichols’ Edinburgh store, as well as the pursuit of further overseas expansion opportunities and investment in the brand’s digital proposition.

Sky News has reported in recent weeks that Next, Frasers Group and Modella Capital – the owner of Hobbycraft and TGJones – had all lodged an interest in a takeover of the brand, which has been owned by the Asian billionaire Sir Dickson Poon for 35 years.

Sources said that indicative offers had already been received from UK-based parties, although international suitors’ bids are being managed using a slightly separate timetable.

Overseas parties said to have been examining an offer for Harvey Nichols include Dubai-based Chalhoub Group and India’s Reliance Retail.

Although interest in buying the business is understood to be widespread and genuine, the required funding commitment will raise questions about the outcome of the process if that capital is not forthcoming.

Last week, Sky News revealed that Harvey Nichols had told brand suppliers that it had been “obliged to allow Frasers Group to participate in the process alongside the other interested parties”.

One bidder said the reference to ‘obligation’ could point towards an eventual transaction implemented by way of a pre-pack administration process – although that route is not believed to be the company’s or owner’s preferred option.

Among the hundreds of brands sold at Harvey Nichols are Armani Beauty, Balmain, Cartier, Juicy Couture, Lancome, Max Mara, Nike, Polo Ralph Lauren and Spanx.

Sir Dickson’s family, who bought the chain in 1991, have appointed FTI Consulting to advise on a sale of the business, with regional advisers also appointed to drum up interest among wealthy Gulf bidders.

Popularised by its frequent references in the 1990s BBC sitcom Absolutely Fabulous, Harvey Nichols has been struggling financially for years.

The company employs about 1,200 people in the UK and Ireland, trading from stores in London, Leeds, Edinburgh, Manchester, Birmingham, Bristol, and Dublin.

It also operates London’s famous OXO Tower Restaurant on the South Bank, while internationally it has stores in Hong Kong, Dubai, Riyadh, Kuwait, and Doha.

Harvey Nichols traces its roots back to 1831, when Anne Harvey went into partnership with Ben Nichols to form the business.

It had a spell as a public company, having floated on the London Stock Exchange in 1996, but was taken private again by Sir Dickson just six years later.

In the most recent financial year for which financial results are available, revenue fell 5% to £204.8m in the 12 months to 31 March 2024, while losses before tax rose to £34m.

One insider said on Friday that Harvey Nichols’ leadership team had presented a “highly credible” business case to prospective buyers, adding that the company was confident of achieving an outcome which secured the business’s long-term future.

A spokesperson for the chain declined to comment.