Harvey Nichols, the luxury department store group, has been acquired by Frasers, owner of volume leisurewear chain Sports Direct.
A “significant restructuring” is now inevitable to ensure the 200-year-old business remains sustainable, said Frasers which acquired from administration, fending off rival interest from Next.
The price paid was not declared but last week, Frasers majority owner Mike Ashley, he said he would be surprised if it would fetch more than £40m.
Mr Ashley, a former Rangers and Newcastle United director, has picked up a number of distressed retailers which risked disappearing from the high street and has pushed into the higher end of the sector.
The Harvey Nichols stores, including its flagship in Knightsbridge, and its international franchise, will join a group that includes House of Fraser, Flannels, Evans Cycles, Jack Wills, Savile Row tailor Gieves & Hawkes and luxury lingerie firm Agent Provocateur. It has launched a takeover for Hugo Boss.
Frasers also owns the Braehead and Overgate shopping malls in Renfrew and Dundee respectively.
Harvey Nichols, which has a branch in St Andrew Square, Edinburgh, was immortalised in BBC sitcom Absolutely Fabulous, but has struggled in recent years. It closed the food retail department in Edinburgh and appointed administrators in June.
Michael Murray, Frasers’ chief executive and Ashley’s son-in-law, called the store a “British institution with significant potential” but added “clear meaningful change is needed”.
He said: “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 stocks more than 800 premium and luxury brands and has more than 1,000 employees. Its other stores are located in Birmingham, Bristol, Leeds and Manchester.
Earlier this week, it warned that it would need to “cease trading” within a year if it failed to secure new investment following “sustained trading and operational challenges”.
Harvey Nichols chief executive Julia Goddard said the deal marked “an important milestone” for the company and “provides a strong platform for the next phase of the business’s evolution”.
Hong Kong billionaire Sir Dickson Poon owned the business for 35 years, it emerged in recent weeks that a turnaround at the business will require at £50 million to £60m in extra investment.
Harvey Nichols’s restaurant in the Oxo Tower, London, is being sold separately and is not included in the deal.
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