Frasers promises to pay Harvey Nichols stylists and personal shoppers following £40m rescue deal

Frasers Group has said it will pay personal shoppers and stylists who feared being left out of pocket by Harvey Nichols’ previous owners.

Mike Ashley’s £40million rescue deal to buy the luxury department store chain came after the chain warned it would run out of money if it failed to secure new investment.

But the takeover has left customers and suppliers worried of not being paid.

Frasers – which is owned by billionaire Ashley and also owns Sports Direct and Flannels – said individuals contracted for their services before it went into administration will be paid in full – mostly within the next 72 hours.

A spokesman for Frasers Group said on Thursday: ‘We have identified a significant number of self-employed individuals who were owed monies for their services as personal shoppers and stylists under the former ownership of Harvey Nichols. 

‘Whilst this would normally be a matter for the administrator with no obligation falling upon Frasers Group, we would like to reassure these individuals that we will ensure they are paid swiftly and in full.’

The statement added: ‘Where possible, Frasers Group does its best to be supportive of individual traders and small businesses. 

‘In future, personal shoppers and stylists who choose to work with Harvey Nichols will be remunerated on a monthly basis, rather than receiving quarterly payments as was previously the case.’

It comes after Frasers’ acquisition of online luxury marketplace Matchesfashion ignited worries among some of the glamorous brands stocked by Harvey Nichols.

Just three months after buying Matchesfashion in December 2023 for £52million, Frasers placed the company into administration with 273 job losses. This led to designer brands, including the likes of Burberry and Gucci, being owed a total of £36million.

Harvey Nicks’ website has been shut down temporarily, with a message that says: ‘Harvey Nichols is currently unavailable online whilst we complete a period of transition. In the meantime, our stores remain open, and our teams are on hand to assist with anything you may need.’

It says it cannot directly refund customers’ orders or gift cards if they were purchased before August 13, as this falls ‘under the ownership structure preceding this transition’.

Customers with outstanding refunds are being directed to administrator FTI Consulting.

Ashley said earlier this month that Harvey Nichols is ‘in a death spiral’.

High Street fashion chain Next withdrew its interest earlier this summer while some private equity companies were also reportedly involved in buyout talks.

In its 1990s heyday, fans of Harvey Nichols included Princess Diana and other fashion-forward ‘Sloane Rangers’.

Mary Portas, the store’s young creative director, made a deal with Absolutely Fabulous where its brash and boozy fashionista characters often mentioned the store and wore its clothes.

She transformed it into a trendy destination for the ‘fashion-forward’ with eye-catching window displays.

But it has failed to make a profit for five years after being hit by a downturn in tourism spending following the Covid pandemic and the removal of a VAT-free shopping scheme.

The business had previously said prospective buyers would need to cough up as much as £60million in investment to help bring it back to its former glory.