Frasers Group has announced it will pay stylists and personal shoppers who feared being left out of pocket following the acquisition of luxury department store chain Harvey Nichols. The commitment comes as part of Mike Ashley's £40 million rescue deal for the retailer, which had warned it was close to running out of funds.
A spokesperson for Frasers Group stated that individuals contracted for their services before Harvey Nichols entered administration would be paid in full, with most payments expected within 72 hours. While typically such matters would fall to an administrator, Frasers Group has opted to ensure these individuals are compensated swiftly.
The company, owned by billionaire Mike Ashley, also indicated that future payments for personal shoppers and stylists working with Harvey Nichols will be processed monthly, a shift from the previous quarterly payment schedule.
This development follows Frasers Group's recent acquisition of Matchesfashion, an online luxury marketplace. The purchase of Matchesfashion for £52 million in December 2023 led to the company entering administration just three months later, resulting in 273 job losses and leaving designer brands, including Burberry and Gucci, owed a total of £36 million.
Harvey Nichols' online operations have been temporarily suspended, with a message on its website stating it is undergoing a transition period. The store's physical locations remain open. Customers seeking refunds for orders or gift cards purchased before August 13 are advised to contact administrator FTI Consulting, as these transactions fall under the previous ownership structure.
Ashley previously described Harvey Nichols as being "in a death spiral." The department store has faced significant financial challenges in recent years, failing to achieve profitability for five years. Factors contributing to its decline include a downturn in tourism spending and the removal of a VAT-free shopping scheme, exacerbated by the impact of the COVID-19 pandemic.
The company had previously suggested that prospective buyers would need to invest as much as £60 million to revive the brand. Other potential buyers, including High Street fashion chain Next and several private equity firms, had previously shown interest but ultimately withdrew or were involved in buyout talks.
In its 1990s heyday, Harvey Nichols was a prominent fashion destination, influenced by figures like Princess Diana and the characters in the television show "Absolutely Fabulous."