Mike Ashley's Frasers Group has acquired the Knightsbridge department store Harvey Nichols, buying it out of administration earlier this month. This latest acquisition adds to a portfolio that includes a significant stake in Hugo Boss, which Frasers Group has now increased to 48%.
The move comes despite a challenging period for luxury goods sellers, as noted by industry analysts. Frasers Group's 'premium lifestyle' division, which encompasses brands such as House of Fraser and Jack Wills, reported a nearly 7% fall in sales and a profit decrease of almost £10m to £147.6m in its latest annual results published in July.
Ashley's strategy has historically involved acquiring struggling businesses during difficult economic times. However, the performance of some luxury acquisitions has been mixed, with Jack Wills, for example, reducing its independent outlets from around 100 when bought in 2019 to just five currently. Similarly, House of Fraser, acquired eight years ago, now has only five stores trading under its original name, down from 60.
Clive Black, an analyst at Shore Capital, suggested that from a financial perspective, the group's spending on upmarket brands "has not been a roaring success," adding that the premium end "has been a burden for the wider group."