Harvey Nichols warns it could collapse without rescue deal, as bidders circle

Mike Ashley’s Frasers Group is frontrunner to buy Knightsbridge-headquartered department store chain

Can Harvey Nichols find its way back to being Ab Fab again?

Harvey Nichols has warned that it will not be able to survive another year without new investment, as bidders for the Knightsbridge-headquartered department store chain circle.

The retailer’s Hong Kong-based owner, Dickson Poon, put it up for sale in June, with Mike Ashley’s Frasers Group aiming to buy it for about £40m.

Harvey Nichols used to attract a high-profile clientele, including the late Diana, Princess of Wales, and its place in popular culture was confirmed in its 1990s heyday by the TV sitcom Absolutely Fabulous, which used the store as a symbol for luxury retail. Yet “Harvey Nicks” has struggled to adjust to increased competition from other shopping destinations, as well as the rise of online retail.

The company has not made a profit since the coronavirus pandemic locked out big-spending foreign tourists, and it reported a loss after tax of £105m after writing off inter-company loans for the year to 29 March 2025, according to accounts published over the weekend.

The directors warned that the company was not a going concern, because it would run out of money within the next year and that it had no agreements for new funding.

The accounts said that the company had received “a number of bids” to buy it, and that it was hoping to complete a deal within the next year.

FTSE 100 retailer Next had been interested in taking over the business, although it has withdrawn its interest, according to more recent reports.

That has left Ashley, the founder of the Sports Direct retail empire, as one of the frontrunners. Ashley, the controlling shareholder in Frasers, on Friday told the Financial Times that Harvey Nichols was in a “death spiral” and that it would be a “huge challenge” to turn it around.

Ashley has bought a series of struggling premium brands in recent years after starting out with a single sports shop. He said he would keep the Knightsbridge and Edinburgh stores, but rebrand other stores as House of Fraser or Flannels under his Frasers Group.

Harvey Nichols was founded in 1831, as a linen shop. Its department store headquarters in Knightsbridge opened in 1889. In the last century it has been owned by Debenhams and the Burton Group, before Poon bought it in 1991 for £53m.

Poon oversaw an expansion outside London , with a Leeds branch opening in 1996. The chain has shops in Birmingham, Bristol, Dublin, Edinburgh and Manchester, as well as a series of restaurants including the one in London’s riverside Oxo Tower. Outside the UK it has a store in Riyadh, one in Dubai, two in Hong Kong and one in Kuwait.

Poon retired as a director in May. Harvey Nichols is led by Julia Goddard, who joined in 2024 from Alexander McQueen.