Modella reportedly eyes Harvey Nichols, Murray says brands don’t object to a Frasers bid

The latest potential bidder being linked to a Harvey Nichols takeover is Modella Capital, another company that’s a prolific buyer of distressed businesses and one that has a mixed track record with its acquisitions.

Sky News reported that it’s among the parties that have expressed interest in the loss-making luxury department store chain with Sir Dickson Poon having put it up for sale after owning it for decades.

Modella is active across all price ranges and recently took over the budget-focused Dealz Poland chain in a deal with Pepco. It also owns Hobbycraft and Flyer Tiger. 

But some of its acquisitions have been troubled with TG Jones (the high street arm of WH Smith) being its latest problem buy. Earlier it acquired The Original Factory Shop and the UK and Ireland arm of Claire’s, both of which were turnaround failures for it.

Industry sources told Sky that Modella was among the firms that had expressed interest in buying Harvey Nichols, “although it was unclear on Monday how serious its intentions were”. Sky also said it had been told that Modella is “an outside bet’ to win the Harvey Nichols business.

Next and Frasers Group are also known to be interested although a number of non-UK parties — in the US, Middle East and Turkey — are also believed to be eyeing the firm. 

That’s hardly a surprise — of the big-name luxury department stores in the UK, Harrods is owned by the Qatar Investment Authority (the sovereign wealth fund of Qatar), while Selfridges is owned by Thai retail conglomerate Central Group (60%) and the Saudi Arabian Public Investment Fund (40%). Liberty London is majority owned by UK private equity firm CVC Capital.

It will be interesting if any of the UK retailers that are looking over the business ends up winning the prize as that list of owners above shows it would make it very unusual in the UK luxury department stores sector.

Modella and Harvey Nichols have declined to comment but one of the UK retailers interested in a purchase, Frasers Group, has been quite vocal on one subject — it has dismissed earlier reports that some Harvey Nichols suppliers would be averse to see it taking over the chain.

CEO Michael Murray has hit out at suggestions some brands are reluctant to engage with the retail conglomerate. He’s accused rival firms of attempting to sabotage Frasers’ bid and called the negative noise “nonsense”.

There had been reports last week that Frasers had forced a reluctant Harvey Nichols to allow Frasers in on the bid race despite some suppliers being unhappy about the prospect.

But without specifically naming Harvey Nichols or who might be behind the story, Murray talked of parties “trying to create rumours.”

He added: “We’ve got very strong brand relationships. We pay all of our bills on time. We invest in our proposition. We invest in expansion and growth.”

Having started with sports retail via Sports Direct, Frasers is now well established in luxury retail and owns the Flannels chain.