A To-Do List for Harvey Nichols’s New Owner

In the heady ’90s, Harvey Nichols was an icon of British luxury. Three decades later, the department store had become a shadow of its former self, reporting annual losses since 2019. Now, that could all change.

Earlier this summer, current owner Sir Dickson Poon put the luxury retailer up for sale. Potential investors, including Frasers Group, Next and retail investment firm Gordon Brothers, were told to submit bids between £50-60 million. But Frasers Group quickly emerged as the frontrunner when founder Mike Ashley spoke to the Financial Times about how desperately Harvey Nichols needed a buyer. On Wednesday, Sky News reported that Frasers were in advanced talks to finalise the deal. Frasers or not, the new Harvey Nichols owner will step in imminently, taking the business on from current owner Poon.

Whether the new owner can succeed in returning the endearingly named “Harvey Nicks” — once synonymous with UK sitcom Absolutely Fabulous and celebrity shoppers including Marc Jacobs, Princess Diana, and Kate Moss — to success is the question on every executive’s lips. Harvey Nichols’s latest posting on Companies House detailed a loss after tax of £177.6 million for the year ended March 29, 2025, following losses of £12.9 million and £4 million after tax in the years prior.

Absolutely Fabulous co-star Jennifer Saunders and supermodel Naomi Campbell at a promotional event in Harvey Nichols’s London store in 1994.

On paper, some fresh investment sounds exciting, but that won’t carry the turnaround. Per The Telegraph, Poon invested £138.5 million into Harvey Nichols over the last five years. Experts agree that a strategic reset is overdue. The broad verdict: Harvey Nichols lost its hold on a niche, failed to keep up with new consumer demands, and grew lax on financial and operational discipline. Insiders are more positive, willing to give its reset under CEO Julia Goddard time to flourish.

Of course, some of its problems are endemic to department stores. Where once, bringing a variety of fashion, beauty, and homewares all under one roof worked well, sales in this channel have declined since the pandemic, Marguerite Le Rolland, Euromonitor’s head of footwear and apparel, tells Vogue Business. She cites the reduced footfall across larger city centres exacerbated by hybrid working environments post Covid, a rise in e-commerce, and changing customer habits as pivotal in this shift.

Meanwhile, the shape of shopping has radically shifted in the sector, as key players have embraced customer profiling technology, AI-generated purchase predictions, and highly personalized customer service experiences in an attempt to keep up. Such developments are expensive, requiring investment in innovation and staffing that can eat into bottom lines.

Additionally, the broader luxury slowdown between 2024 and 2025 proved critical, with the luxury market shrinking for the first time (bar Covid) since the Great Recession. Together, the events of this decade crafted the perfect storm for Harvey Nichols, which, unlike some of its competitors, only began adapting recently.

Nonetheless, all is not lost. Following two years of slow demand, the global luxury market will return to growth in 2026, up between 3% and 5%, management consultancy Bain forecasted earlier this summer. The new owner should ride this recently stabilizing market.

The department store model of yore is difficult. Stores are “very capital-intensive”, notes Anne Critchlow, a consumer analyst at Berenberg. She points to the long leases on buildings as one of the first things Harvey Nichols’s new owner should consider restructuring, with rent being a major cash outflow. “There should be an opportunity to negotiate with landlords and perhaps agree more appropriate terms,” she says.

Once that’s dealt with, Critchlow suggests enhancing retail operations, noting that the price mix at Harvey Nichols — affordable luxury, aspirational luxury, and premium luxury — offering “very healthy” price points that make Harvey Nichols, versus a lower-end retailer, a strong contender to capitalize on e-commerce. “Higher average ticket prices mean a higher average basket,” she says. In essence, the premium pricing means the average transaction value is higher, and as a result, the shipping and transport of goods bought online is relatively low.

But digital transformation has been a pain point for many of the department stores since online retail flourished, Harvey Nichols included. HarveyNichols.com — the online wing of the business — reported an operating loss of £14.3 million and a 4.6% turnover decline for the year ended March 29, 2025. For the year ending March 2024, the operating loss was £10.2 million, with a 10.7% turnover dip. The prior year, the operating loss was £6.3 million, with turnover up 1.7%.

Looking ahead, the new owner should hone the logistics, developing the warehousing, shipping, and returns network.

Optimized supply chain management will be crucial, especially if the new owner is to win the trust of Harvey Nichols’s suppliers. Gary Wassner, CEO of Hilldun, a New York-based factoring firm, has more than 30 clients shipping to Harvey Nichols, and is naturally protective of them. “We mitigate much of the damage for our clients, but smaller, less sophisticated brands who are not factored by Hilldun, bear the brunt alone,” he says. “These hard-working designers deserve partners who purchase in good faith, knowing they have adequate cash flows to pay them with. Inventory is everything, and if inventory isn’t flowing into the stores, then [Harvey Nichols has] no chance of competing.”

As he sees it, getting merchandise later than competitors — or not at all — is the death knell for a fashion retailer. As such, the new owner must ensure it has adequate capital to fulfill inventory requirements. Even a sniff of instability and brands will withhold deliveries.

Ensuring all brands are paid what they’re owed should be the new owner’s first priority, notes Ida Petersson, the co-founder of brand strategy agency Good Eggs and former Browns buying director. “Our industry cannot afford another Matches,” she says. “There are simply too many vulnerable brands that are still on the back foot trying to recuperate what was lost.”

While broad public opinion surrounding Harvey Nichols is still marred by the same generalizations of the last four years — tired, lacking vision, slow on new brands — the consensus among industry figures is stronger, not least since CEO Goddard stepped in during summer 2024. Quickly, she set to work on refreshing inventory, introducing new brands to the store.

Goddard’s turnaround plan kicked off with a new retail team, the appointment of ex-British Vogue editor Kate Phelan as creative director, and the naming of Kate Benson (formerly of Net-a-Porter) as chief merchant. As part of this shift, Goddard has embraced the boutique-like status of Harvey Nichols, engaging directly with the Harvey Nichols shopper she sees herself. “​Let’s build a store for us. I think it’s much better to focus on something that we know is tangibly there,” Goddard told Vogue Business late last year. “I live in Notting Hill, and I see the customer every day. They’re still consuming, but they’re doing it in different ways… they will buy a beautiful leather jacket and a great knit once or twice a year, because they want to look good while dropping their kids to school and rushing off to the office.”

A year and a half into the role, Goddard is spearheading a renovation and team restructure with the intent to restore the British retailer’s strong position in the city of London. Here, she explains the strategy and takes us on a tour of the revamped building.

Perhaps, the issue is one of time. The new owner will need to better publicize the good work of Goddard, while also finding a way to translate that beyond the industry bubble.

Bernstein luxury goods analyst Luca Solca concurs, arguing that in a pressured multi-retail marketplace, the most pressing objective is owning a niche and aligning the whole business around that mission. He cites Harrods’s monopoly on the wealthiest consumers as a case in point.

Artem del Castillo, founder of brand Delos and concept store Odeum, both suppliers to Harvey Nichols, doubles down on the need for a unique value proposition at the stores. “It must protect what made it important: a distinctive point of view, genuine discovery, and the courage to champion independent designers rather than retreating into the safest commercial names,” he says. Jeppe Meier, co-founder of Forét, also stocked by Harvey Nichols, shares a similar sentiment. “We’d love to see the new owners continue building on Harvey Nichols’s role as a destination for discovery, supporting a mix of established and emerging brands, while creating strong partnerships that allow those brands to tell their stories.”

Masha Markova Hanson, Odeum founder Artem Del Castillo, and Zara Martin at Odeum’s Harvey Nichols launch party this sumner.

If Harvey Nichols can’t differentiate itself quickly, on a regional and global scale, it won’t re-embed itself as a cultural fixture. “The new owners will need to take a long hard look at regional stores to assess whether the cities they’re located in can properly support this. If not, the online presence can fill the gap,” says Neil Saunders, Globaldata’s managing director and analyst.

“Either re-assorting or closing some of the regional stores will be necessary,” says Petersson, explaining that a strong understanding of different cities’ needs, desires, and spending power will be essential to business success.