When Dickson Poon, the Hong Kong billionaire, paid the equivalent of £130 million (€151 million) at today’s prices for Harvey Nichols 35 years ago, he said its shop in Knightsbridge, London, was “one of the greatest stores in the world”. He turned the department store frequented by Princess Diana into a luxury group with six UK outlets and several international franchises.
Harvey Nichols was acquired again last week, this time for about £40 million in a pre-packaged administration – something akin to receivership in Ireland. The new owner is Frasers Group, the UK company controlled by Mike Ashley, who became a billionaire by building his Sports Direct discount chain from one store into a multi-brand international retail group with a market value of £3.6 billion.
It is typical of Ashley to strike a bargain for “Harvey Nicks”. It still feels incongruous that a former squash coach known for cut-price retailing, a sharp eye for trading corporate assets and aggressive tactics towards rivals should own the genteel department store. As he told the FT recently, “I’m not Mary Poppins – when you get in a fight with me, I’ll come back at you.”
His reputation for being a discount retailer is outdated. Frasers has been moving steadily upmarket under its “elevation” strategy, led since 2022 by Michael Murray, chief executive and Ashley’s son-in-law. It controls about 100 luxury stores, led by the Flannels department store chain, and has partnerships with brands such as Moncler, Gucci and Burberry.
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But Ashley, who is no longer a director of Frasers but holds a majority stake in the business, is as sharp as ever. Some of the luxury suppliers to Harvey Nichols are still smarting from Frasers’ tactics after it acquired the Matches Fashion chain in 2023 and shut it down within months. It emerged with a profit, while they got pennies on the pound as trade creditors.
The road to Harvey Nichols stretches back a decade to when Sports Direct was overtaken by its smarter rival JD Sports. Ashley had fallen out with suppliers such as Nike and Adidas over his ruthless discounting and messy stores. He saw that shoppers were no longer purely seeking bargains, but were increasingly being drawn by brands.
His second insight was that of a value investor. High street retailing was shrinking and valuations were falling as ecommerce rose, giving him the chance to recycle Sports Direct’s surplus cash into brands and physical stores. “It’s going to be a lot smaller pond, but [some] fish are going to be enormous,” he remarked in 2019.
This led to today’s Frasers, which owns a range of brands and stores, including the House of Fraser chain. Sports Direct bought the latter out of administration in 2018, found it was in even more trouble than Ashley realised and scythed through it, closing stores and cutting jobs. Its deals have had mixed results, but it usually finds a way to extract some return.
The strangest aspect of Frasers is that it also behaves like a corporate hedge fund, buying stakes in public companies including Mulberry, Boohoo (also known as Debenhams) and Hugo Boss, the German brand. It launched a €2.7 billion takeover offer for Boss in June and this week announced that it had built its stake to 48 per cent, despite getting a chilly response.
The investments can turn out to be the prelude to a bid, as with Boss; an attempt to secure leverage over brands in Frasers stores; or simply Ashley’s instinct for an undervalued asset (“I just think it’s very cheap,” he said of his Boss stakebuilding). But they puzzle even his fans. “We see the individual pieces of the jigsaw, but only he knows the picture,” one investor says.
Ashley has a fearsome mystique. Clive Black, head of consumer research at Shore Capital, describes him as “a terrible beauty”. But his tactics do not do much for Frasers’ rating as a public company. Many investors find it too opaque and unpredictable to touch, although its stock market valuation has risen by 20 per cent in a year amid its burst of deal making.
The salutary comparison is Next, another multi-brand retailer with a strong supply chain and logistics platform. Next has ascended steadily to a market capitalisation this week of £18 billion – five times that of Frasers – thanks to consistent growth under Simon Wolfson, chief executive. Their operations have a lot in common, but there is a gulf between their styles.
One answer would be for Ashley to take Frasers private again, although he denies even considering it. While Murray insists he is in charge, the hand of the founder is not well hidden. Frasers’ purchase of Harvey Nichols may elevate its reputation, but do not expect Ashley to change his nature. – Copyright The Financial Times Limited 2026
