Harvey Nichols. Somebody has to say it's over.
Mike Ashley wants Harvey Nichols for under 40 million quid and says it's in a death spiral. He may be an immune response to a broken business model.
THE GIST ON HARVEY NICHOLS: "Somebody has to say it's over"
What is Mike Ashley doing now?
Harvey Nichols has been put up for sale. Mr Sports Direct wants to buy it for less than £40 million, and says it's in a death spiral while he tries to close the deal. Someone's got to be the person to say when it's over.
He has done this before. He bought House of Fraser in 2018 for £90 million. It had 60 stores, now it has 20. He bought Matches Fashion two years ago and put it into administration three months later.
What is his pitch?
Keep the Knightsbridge store for the name, rebrand the rest into Frasers labels, and strip out everything that doesn't earn.
Why is the shop worth less than its parts?
For so many British high street brands, the shop is worth less than the sum of its parts. Argos went from £1.4 billion to £121 million. Debenhams went to Boohoo for £55 million. Wilko was basically sold for a packet of pork scratchings.
All the fixed costs have gone up and every source of footfall has gone down. Running a shop just as a shop is a slow descent into hell.
What is Mike Ashley, really?
The best way to look at him is as an immune response to a broken business model. When the music stops, a ruthless buyer does a service that no polite person will do.
The owner can't face it himself, which leaves Mike Ashley. That willingness comes at a price, but politeness would have been more expensive.
Is Mike Ashley saving the high street or finishing it?
Your take. One tap, then see how everyone else voted.
Quick answers
What does Mike Ashley want to pay for Harvey Nichols?
Less than £40 million, according to Huw.
What happened to House of Fraser under him?
He bought it in 2018 for £90 million. It had 60 stores and now has 20.
Why do shops struggle?
Fixed costs have gone up and footfall has gone down, so running a shop just as a shop is a slow descent.
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