Frasers Group, the retail empire controlled by Mike Ashley, has changed its plans for Harvey Nichols, with the Birmingham store now set to close in January. The revised approach has left staff unsure about their jobs, even though Frasers has promised to keep the Edinburgh, Manchester and London stores.
Frasers bought the Harvey Nichols stores from administrators in August. At that point Ashley, the group’s majority shareholder, said the Knightsbridge and Edinburgh shops would stay as they were, while the stores in Birmingham, Leeds, Manchester and Bristol would be rebranded as House of Fraser or Flannels. Under the updated plan, Bristol and Leeds will become Flannels and Birmingham will shut, a change that has raised questions about how committed Frasers is to the brand.
The scale of the problems Frasers inherited was considerable. When it entered administration, the Harvey Nichols Group owed about £100m to unsecured creditors, including dozens of fashion labels ranging from Canada Goose to Victoria Beckham. The business also trades internationally, with stores in Riyadh, Dubai, Doha and Kuwait and two in Hong Kong, while administrators closed its Dublin store in September. In Edinburgh, the store on St Andrew Square has helped turn the area into a luxury shopping quarter for the Scottish capital.
Michael Murray, chief executive of Frasers Group, told a fashion magazine that the company would pursue a “broader luxury strategy” that lets it keep a presence in these cities while bringing the stores into line with Flannels, its own upmarket fashion chain. Harvey Nichols now sits in a Frasers portfolio that already includes House of Fraser, Jack Wills, Sports Direct, Savile Row tailor Gieves & Hawkes and lingerie brand Agent Provocateur.
For Ashley, Harvey Nichols is the latest well-known name to join a group that spans sportswear, department stores and luxury fashion. The question for employees, and for the brands still owed money from the administration, is how much of the Harvey Nichols identity will survive as Frasers folds stores into Flannels and House of Fraser. The Birmingham closure in January will be the first concrete test of the new plan. The fate of the Edinburgh, Manchester and London sites, which Frasers has pledged to keep, will show whether the luxury name retains a distinct role inside Ashley’s retail group or gradually gives way to the company’s own fascias.
