What Went Wrong for Harvey Nichols?

Recent reports reveal that the iconic department store is at risk of folding if a rescue bid doesn’t come in soon.

Accounts filed with Companies House suggest that the retailer is unlikely to be able to continue trading beyond the next 12 months. Administration looms for the retail giant as they hope to find a buyer to save them.

Next and Mike Ashley’s Frasers Group have emerged as the two frontrunners to take over the ailing business. Given the financial state of Harvey Nichols, though, Ashley told the Financial Times that he “wouldn’t be crying a river” if unsuccessful with his bid, “and [he doesn’t] think Next would be either.

“I don’t think I’ll be writing a huge cheque, because you’ve got to think about the future losses. If it was a little bit tough before, it is in a death spiral now,” Ashley went on to comment.

So, what went wrong for Harvey Nichols?

Well, for a start, it hasn’t posted a profit since the pandemic.

Covid-19 hit almost all businesses hard, but Harvey Nichols they felt the absence of foreign tourists splurging in their stores particularly hard. The company has now posted five straight years of losses, with accounts to March 2025 showing an 11% drop in turnover and widening operating losses of £177.9m.

Loss of exclusivity

‘Harvey Nicks’, as it’s affectionately known, has been around for 195 years, but really made a name for itself in the 90s. Popular sitcom, Absolutely Fabulous, regularly namechecked the store as a luxury hangout for the rich and famous.

That exclusivity, however, has waned since then, partly because of the expansion that saw the brand expand into six other cities in the UK and 12 other outlets across the globe. Prior to this, Harvey Nichols’ location close to Harrods saw the store trading as one of the quintessential places to go in upmarket London.

Alongside this, Harvey Nichols stopped reacting so quickly to hot new designers and started offering the same products as rivals such as Harrods and Selfridges instead. Once this happened, they no longer became a destination, and merely just another store.

Digital missteps

Commentators have remarked upon the store’s digital presence being lacking too. As a strong brand, Harvey Nichols is surprisingly quiet across social channels where others flourish.

As a well-respected influencer before the age of social media, it could well be that Harvey Nichols is missing a trick by not exploiting this more.

Issues at the top

Dickson Poon has been owner of Harvey Nichols since acquiring the luxury firm in 1991 for £53.6m. Recently, Hong Kong’s Market Misconduct Tribunal found the magnate guilty of insider dealing in shares of his conglomerate, Dickson Concepts.

Although Harvey Nichols is owned by a private trust in the Poon family, this case looks to be an unwelcome distraction as the owner looks to offload it.

What’s next?

Ashley has commented that although Poon is looking for £50m-60m, he’s only prepared to bid around £40m. The Frasers Group owner is confident that this will beat out Next as he’s the only one happy to “overpay” given how Harvey Nichols would compliment the rest of his portfolio.

It’s thought that while Ashley would look to keep the flagship Knightsbridge branch, he’d be looking to convert others into Flannels or House of Fraser stores.

Any closures could see around 1,200 jobs and seven UK and Ireland stores affected.

Is your business finding conditions difficult?

At Forbes Burton, we’re able to help with restructuring plans, strategise the best way to exit, or even find a buyer for your business. Our initial phone consultations are entirely free of charge and will give you an idea of the best route to take.

Call today on 0800 060 8548 or email advice@forbesburton.com for a free consultation with one of our expert advisers and find out how we can help business owners navigate an uncertain future.