Mike Ashley's Frasers leads race to buy Harvey Nichols, Sky News reports

• Ashley expects Harvey Nichols to sell for less than £40 million and previously described the chain as being in a 'death spiral', calling a turnaround a 'huge challenge'
• Rival bidder Next could still sweeten its offer, while private equity firm Modella Capital was also among interested parties in July
• The deal would add another luxury retail brand to Ashley's growing portfolio of high-street acquisitions through Frasers Group

Summary:

Frasers Group, owned by billionaire Mike Ashley, has emerged as the leading bidder to acquire British luxury department store chain Harvey Nichols, according to Sky News. A deal is expected to be completed early next week, marking the latest addition to Ashley's expanding portfolio of high-street retail acquisitions.

Key Details:

• The acquisition would end 35 years of ownership by Hong Kong businessman Sir Dickson Poon
• Ashley estimates the purchase price at less than £40 million
• Rival bidder Next could potentially submit a higher offer, though Frasers remains the frontrunner
• Private equity firm Modella Capital was also reported as a potential interested party in July

Market Context:

Ashley has characterized Harvey Nichols as being in a "death spiral" in recent Financial Times comments, acknowledging that turning around the struggling luxury retailer would present a "huge challenge." This assessment underscores the difficulties facing traditional department stores amid changing consumer behaviors and increased competition.

The potential acquisition fits Ashley's strategy of consolidating distressed or underperforming retail brands, though the low valuation reflects Harvey Nichols' current operational challenges. The outcome could reshape the UK luxury retail landscape and may indicate broader consolidation trends in the struggling department store sector.

Neither Harvey Nichols nor Frasers Group has officially commented on the transaction. The deal's completion next week would provide clarity on the future direction of the iconic British luxury retailer.