Harvey Nichols, Selfridges, and the Succession Question.

How two London department stores faced the same problem and arrived at very different places.

Frasers Group completed the acquisition of Harvey Nichols on 13 August. Pre-pack administration. Six UK stores, the online business, more than 1,000 employees, and a portfolio of over 800 premium and luxury brands. The FT reported a price of roughly £40 million. Frasers hasn’t confirmed the figure.

Dickson Poon bought Harvey Nichols from Burton Group in 1991 for £51 million. Five years later, with Joseph Wan running the business, it floated on the London Stock Exchange at a valuation of £148.5 million. Shares priced at the top of the range. A P/E of 26. Poon retained 50.1%, took £64 million off the table, and still owned the majority of a business worth nearly three times what he’d paid.

Thirty-five years later, it’s gone for roughly £40 million. Less than Poon originally paid.

Revenue fell from £204.9 million to £184.8 million in the last financial year alone. The post-tax loss widened to £48.7 million from £34.1 million. The stores had become tired. The online business was never properly invested in. The brand lost its connection with a younger generation of luxury consumers who moved on. The Poon family kept funding the losses until eventually the funding stopped.

But the numbers are a symptom. The cause runs deeper. And I know this world well enough to see what happened.

I worked alongside Paul Kelly when we transformed the Switzer Group into the Brown Thomas Group after the Westons acquired the Irish arm of House of Fraser. Kelly was my mentor then. He’s still a friend. So when I look at Harvey Nichols now, I’m not reading it as a news story. I’m looking at what went wrong with the succession after Wan left, and comparing it to what went right at Selfridges under Kelly and the Westons.

Wan ran Harvey Nichols for 22 years. He arrived in 1992 when the store was tired and turned it into the most talked-about fashion retailer in Britain. The fifth floor food hall. The Absolutely Fabulous years. Leeds in 1996, Edinburgh and Manchester in 2002. He made Harvey Nichols mean something.

But Wan wasn’t just a showman. He was a chartered accountant by training. A financial pragmatist who wouldn’t expand unless the rent economics were right. He piloted the business through its acquisition from Burton Group at £51 million, built it into a £148.5 million business by the 1996 IPO, and navigated the privatisation when Poon took it back. He built the OXO Tower as a high-margin hospitality anchor. When Lehman Brothers collapsed in 2008 he was in New York. He called the buying office in London that day and told them to cancel orders and return stock. Didn’t wait for a board meeting. Just picked up the phone. That single call, he said afterwards, saved the company from disaster.

Over 22 years, the chartered accountant had become a merchant without ever losing the financial discipline. That combination is what held Harvey Nichols together.

When Wan retired in 2014, the board looked at his background and saw chartered accountant. So they hired another finance person. Stacey Cartwright from Burberry. But Wan hadn’t stayed a chartered accountant. He’d spent 22 years becoming a merchant on top of it. Cartwright arrived with the same starting point Wan had. She just hadn’t made the same journey.

Cartwright lasted four years. Then two co-COOs. Then one of them alone. Four leaders in a decade. None of them carried what Wan carried.

Harvey Nichols didn’t collapse because of one bad decision. It drifted. Slowly, over ten years, without anyone at the top who combined both sides of what Wan had been. The stores became tired because nobody fought to keep them fresh. The online business stalled because nobody with merchant instinct was driving it. The brand lost relevance because nobody was making the creative calls that Wan would have made instinctively.

The OXO Tower, the hospitality anchor Wan built as a high-margin destination, wasn’t even included in the Frasers deal. It was sold separately. The disaggregation of what Wan had assembled for Dickson Poon is now complete.

Selfridges faced the same question a decade earlier.

Vittorio Radice transformed Selfridges from 1996 to 2003. Central escalators, yellow bags, experiential retail before anyone used the term. Then he left for M&S.

The board promoted Peter Williams, Radice’s finance director, into the CEO role. Same pattern. A leader who combined creative vision with commercial discipline replaced by someone who carried the financial credentials but not the merchant instinct. Williams lasted less than a year.

Then the Westons took control and the story changes entirely.

The Westons had already built something in Ireland and in Canada, where they owned Holt Renfrew. They’d acquired the Irish arm of House of Fraser, the Switzer Group, and appointed Paul Kelly to run it. I was there. Kelly and I worked together to transform Switzer’s into the Brown Thomas Group. A business built from the ground up.

When the Westons acquired Selfridges, they didn’t run a search. They already had Kelly. They’d known him since 1984. Galen Weston had watched him run Brown Thomas for over a decade and knew exactly what he was getting.

Kelly was the same kind of operator Wan had become. Merchant eye, financial discipline, both working together. He didn’t try to be Radice. He built on what Radice created and ran it with the rigour the Westons required.

The Westons gave Kelly something Wan never had. Long-term private capital and the patience to let him invest without quarterly earnings pressure. Kelly used it. The Wonder Room, the designer shoe galleries, the Oxford Street flagship rebuilt as a theatrical shopping destination. These weren’t quick wins. They were long-term bets on what a department store could become, funded by owners who understood the sector well enough to wait for the return.

From that base, Kelly built the Selfridges Retail Group. He transformed Brown Thomas and Holt Renfrew, the businesses the Westons already owned. Then he led the acquisitions: Selfridges, then De Bijenkorf in the Netherlands, then Arnotts in Dublin. A global luxury department store group across four countries. He maintained Selfridges’ position as one of the leading retailers in the world.

That group sold in 2022 for £4 billion.

Two London department stores. Two visionary leaders who defined a generation. Both replaced by people who carried one half of what the predecessor had been. One business had an owner who already knew the right person. The other didn't.

The creative vision and the commercial discipline aren’t two different skills. They’re one skill. The operators who carry both are rare. Some of them start in finance and build the merchant eye over time. Wan proved that. Some start on the shop floor and learn the numbers. The starting point matters less than whether they end up carrying both.

When you find someone who does, you back them. When you lose someone who did, you don’t replace them with half the package.

The UK House of Fraser took a different path entirely. It ended up with Mike Ashley and became Frasers Group. Similar roots to the Weston businesses. Very different trajectory.

But I wouldn’t write Ashley off here.

Frasers calls it the Elevation Strategy. The push from Sports Direct into premium and luxury. Flannels is already established. The Webster and MILE sit alongside it. Relationships with Gucci, Prada, Moncler, Burberry, Dior. Harvey Nichols now gives the strategy a Knightsbridge flagship and a 195-year-old name.

And then there’s the Hugo Boss bid at €1.98 billion. If that completes, Ashley has a global luxury brand and the best department store site in London under the same roof.

The track record demands caution. MatchesFashion collapsed within months of Frasers acquiring it in 2023. The brand and IP were ultimately picked up for £19 million after 250 employees lost their jobs and £80 million of stock was left behind. House of Fraser has been through substantial restructuring since Frasers bought it out of administration. Neither is a reassuring precedent.

Michael Murray, Frasers’ CEO, said the turnaround will require tough choices and that Harvey Nichols could become a smaller business in the near term. That’s the right language. Whether the execution matches it is the test.

Harvey Nichols Knightsbridge is not MatchesFashion. It has walls. It has a location that generates footfall regardless of the brand inside it. It has a food hall and a restaurant culture that Wan built and that still draws customers even when the fashion floors don’t.

Nobody has compared Mike Ashley to Bernard Arnault before, I’m not sure anyone will again but bear with me. Arnault built LVMH by acquiring luxury brands at the right moment and running them as a portfolio under tight financial control. Ashley is doing a version of the same thing from a very different starting point. The Knightsbridge store as the anchor. Hugo Boss as the brand. Flannels and The Webster as the supporting formats. It might be time to start paying attention to where this is heading.