Suppliers to the luxury department store Harvey Nichols are increasingly cautious about future dealings with the brand following its recent takeover by Mike Ashley's Frasers Group. Concerns stem from fears of delayed payments and potential financial losses, echoing experiences with other Frasers Group acquisitions.
The apprehension among fashion brands is palpable, with some reporting that many have been negatively impacted by the collapse of the website Matches Fashion, which was also acquired by Ashley's group in 2023. Matches Fashion later went into administration in 2024, owing approximately £210 million to around 541 creditors, including prominent fashion houses like Burberry, Gucci, Prada, and Toteme, which reportedly received only a fraction of their outstanding debts.
One fashion executive, speaking anonymously, noted that "Frasers screwed so many brands when it abruptly closed Matches." This sentiment suggests a broader wariness towards any entity associated with the Frasers Group, potentially leading to demands for stricter payment terms.
Further fueling these concerns is data from PaymentCheck, a late payment tracker. The data indicates that a significant 34 percent of payments from Frasers Group have been classified as late, creating "considerable unpredictness and cash flow risk for suppliers."
These anxieties come as some Harvey Nichols suppliers face substantial potential losses on their invoices. The department store entered administration earlier this month before being acquired by Frasers Group for £40 million. Adding to the disruption, Harvey Nichols closed its website last week, informing customers that orders placed before August 13 would fall under the former ownership and could not be processed, potentially impacting refund capabilities.
Mike Ashley has initiated a step to address some of the industry's concerns by agreeing to pay in full the sums owed to self-employed personal shoppers and stylists who had not been remunerated by Harvey Nichols. This payout, totaling a six-figure sum, aims to mend some relationships within the fashion sector. Ashley has stated plans to integrate Harvey Nichols into Frasers’ "existing luxury ecosystem," envisioning it as a key shopping and social destination.
However, Frasers Group has not yet commented on how Ashley intends to restore confidence among the suppliers crucial to his vision for Harvey Nichols.