Harvey Nichols’ Birmingham store is to close in January with the loss of at least 60 jobs, as owner Frasers Group begins to rebuild the department store chain it bought out of administration in August.
Staff at the store, which opened 25 years ago, were informed this week, according to the fashion trade journal Drapers, which first reported the plan. The Leeds and Bristol stores will be rebranded as Flannels, the luxury fashion chain owned by Frasers.
The future of the three remaining UK stores, in Manchester, Edinburgh and at the chain’s Knightsbridge headquarters in London, is unclear.
Mike Ashley, whose Frasers Group also owns Sports Direct, previously said he would keep the Knightsbridge and Edinburgh stores but rebrand the other four, in Birmingham, Leeds, Manchester and Bristol, as House of Fraser or Flannels.
Frasers paid £43m for Harvey Nichols when the chain went into administration in mid-August. The deal saves six UK stores and around 1,000 of the group’s 1,200 jobs. The Oxo Tower restaurant in London is being sold to a separate buyer, saving more than 130 jobs.
A seventh store, in Dublin, was closed by administrators in September. Outside the UK, the Harvey Nichols name also trades in Riyadh, Dubai, Doha and Kuwait, and in two stores in Hong Kong.
In buying the business, Frasers said it would review and “rationalize” its store portfolio, organizational structure, operating model and cost base.
Michael Murray, chief executive of Frasers, said at the time: “Change will require difficult choices, and we are prepared to make those decisions, even if it means a smaller business in the near term, to create a stronger and more sustainable Harvey Nichols for the long term.
The closure follows the publication of a filing that sets out the position of the chain’s creditors. Companies House documents show that major trading entity, Harvey Nichols and Company, has entered into administration of debts of £270.5m to unsecured creditors, with the administrator, FTI Consulting, estimating that no more than 15 per cent will be returned.
Brands that owe it include Canada Goose and Victoria Beckham.
Frasers has built an interest in luxury fashion through Flannels and through large stakes in brands such as Mulberry, the British handbag maker.
In a recent statement about the group’s luxury division, Murray said: “Our ambition is clear: to continue to scale Frasers Group Luxury globally through organic expansion, acquisitions and strategic investments, creating long-term value for brand partners, customers and the group.”
The group has also raised its stake in Hugo Boss to 48 percent, just short of controlling the German label. Hugo Boss management and the supervisory board recommended on July 9 that the shareholders reject the takeover offer of Frasers, saying the price is “inadequate from a financial point of view”.
Ashley, who started with a single sports shop, has bought a series of premium brands struggling in recent years. Frasers bought House of Fraser out of administration in 2018 and has since closed around 40 of its 60 stores.