Suppliers to Harvey Nichols are expected to receive less than 15p in the pound after the luxury department store group was acquired by Frasers Group through a pre-pack administration, according to new filings at Companies House.
The documents reveal that the group’s primary trading entity, Harvey Nichols and Company, fell into administration owing £270.5 million to unsecured creditors. Early-stage estimates from the administrators, FTI Consulting, indicate that a maximum of 15 per cent of that sum is expected to be returned.
Brand partners set to lose out include Victoria Beckham, Jimmy Choo and Canada Goose, which are owed about £353,349, £174,201 and £565,267 respectively. Other unsecured creditors include Jo Malone, Puig and Estée Lauder. Preferential creditors, among them HM Revenue & Customs, are expected to be repaid in full.
Frasers acquired Harvey Nichols last month, seeing off competition from Next and other international suitors after the chain was put up for sale by the Hong Kong billionaire Sir Dickson Poon following years of losses. Business Matters reported at the time on how Harvey Nichols was sold to Frasers through a pre-pack deal that preserved more than 1,000 jobs and secured the immediate future of its British store estate, including the Knightsbridge flagship and a number of regional stores.
How the pre-pack leaves creditors exposed
A pre-pack is a fast-track insolvency process in which a buyer is lined up to acquire the business straight after the administration. The House of Commons Library describes it as an arrangement under which the sale of a company’s business or assets is negotiated with a purchaser before the administrator is appointed.
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