Harvey Nichols warns it could collapse within a year without a rescue deal

Published Aug 9, 05:45 PM UTC

Harvey Nichols, the iconic British luxury department store, has warned it could collapse within a year unless it secures a rescue deal or finds a buyer. Newly filed accounts show the retailer is scrambling to avoid administration, with no new funding agreed as of July 30. Owner Sir Dickson Poon put the store up for sale in June, and Mike Ashley's Frasers Group has emerged as the front-runner, though Ashley described the chain as being in a 'death spiral' and expects it to sell for under £40m. The Knightsbridge flagship store accounts for a disproportionate share of sales, while regional outlets struggle. Sales at the flagship fell from £78.1m to £69.4m year-on-year, hit by inflation, currency movements, the cost-of-living crisis, and the abolition of VAT-free shopping for tourists. A potential deal could be announced early this week, but some bids may require the retailer to enter formal administration first, paving the way for a break-up sale.