Frasers Group is expected to announce the acquisition of Harvey Nichols on Thursday, 13 August, through a pre-pack administration that could determine the future of the loss-making department store chain and its 1,200 UK-based employees.

Sky News reported that Mike Ashley’s Frasers Group has been in detailed negotiations for several weeks with FTI Consulting, Harvey Nichols’ adviser and standby administrator, over a potential rescue deal. The transaction would require court approval and could bring an end to Sir Dickson Poon’s 35-year ownership of the luxury retailer.

Frasers is understood to be considering a 12-month commitment to retain Harvey Nichols’ London headquarters, although it remains unclear whether this would cover the group’s entire UK workforce. The retailer operates its flagship Knightsbridge store alongside branches in Manchester, Leeds, Bristol, Birmingham and Edinburgh.

The proposed deal could include Frasers taking on the full UK store estate, with the possible exception of the Dublin operation. Discussions over the future of the Dublin store were continuing in recent days, while rival bidder Next is understood to have been considering a different approach to the estate.

Frasers is further understood to be prepared to settle outstanding payments owed to Harvey Nichols’ brand partners. The issue has attracted scrutiny following Frasers’ acquisition of luxury online retailer Matches in 2024, after which suppliers raised concerns about the treatment of brand partners.

The financial position facing Harvey Nichols has deteriorated sharply. Companies House accounts for the year to 29 March 2025 showed turnover at the department store fell 11.1 per cent to £69.46 million, while its operating loss widened to £178 million from £14.4 million.

Harvey Nichols attributed the losses to a £169 million impairment of intercompany loans, while citing weak consumer demand linked to the cost of living crisis and the loss of tax-free shopping in the UK as factors affecting trade. The wider group recorded a loss before tax of £177.4 million for the year.

Harvey Nichols directors warned earlier this week that the business could “cease trading” within 12 months without a sale or further funding. Ashley previously described the retailer as being in “a death spiral” and said he would be surprised if it fetched more than £40 million.

The department store group has told prospective buyers that up to £60 million of investment may be required to fund its transformation. Harvey Nichols has recorded five consecutive years of losses, although investment in its Knightsbridge flagship is understood to have improved its performance.

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