Next is preparing a takeover bid for luxury department store chain Harvey Nichols, according to Sky News, as the FTSE 100 retailer explores another acquisition following a series of high-profile purchases of British retail brands.

Sky News reported that Next is drawing up plans to make an offer after Harvey Nichols was put up for sale by its Hong Kong-based owner, Sir Dickson Poon. The report said the process is at an early stage, although sources described Next as serious about assessing the opportunity.

Both parties did not provide comment to Sky News.

The potential acquisition would extend Next's strategy of acquiring established retail brands. The company, which has a market value of more than £17.5 billion, has bought FatFace, Joules and Made.com in recent years, and acquired footwear retailer Russell & Bromley through an insolvency process earlier this year.

Sky News reported it remains unclear whether Next would seek to retain Harvey Nichols' network of regional department stores or focus primarily on its brand and intellectual property.

The outlet previously reported that Sir Dickson had appointed advisers at FTI Consulting to explore a sale after years of financial difficulties at Harvey Nichols. The luxury retailer has recorded five consecutive annual losses, reporting a pre-tax loss of £34 million for the year to 31 March 2024, compared with a £20 million loss a year earlier, while revenue fell 5 per cent to £204.8 million.

Harvey Nichols has been attempting to revive its fortunes under chief executive Julia Goddard, who has overseen investment in the retailer's digital operations and a refurbishment of its flagship Knightsbridge store. The business employs around 1,200 people across stores in London, Leeds, Edinburgh, Manchester, Birmingham, Bristol and Dublin, while operating international locations in Hong Kong, Dubai, Riyadh, Kuwait and Doha.

Sir Dickson's sale process has reportedly attracted interest beyond Next. Frasers Group, controlled by Mike Ashley, had previously held discussions about acquiring Harvey Nichols' regional UK stores but is not currently believed to be participating in the wider auction process. The broadcaster added that wealthy buyers from Asia and the Middle East are expected to examine the business as the sale progresses.

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