Frasers Group folds Harvey Nichols and Flannels into a luxury division

Frasers Group has launched a new luxury division, folding Harvey Nichols, Flannels and The Webster into a single business called Frasers Group Luxury. The company said the move marks "the beginning of a new era" and called it an ecosystem spanning the UK and US.

The company said the division is built to grow globally through a combination of the three retailers, its digital capabilities and its investments, with long-standing strategic brand partners at its core. It described the platform as the next phase of a luxury strategy more than a decade in the making.

Michael Murray, the group's chief executive and Mike Ashley's son-in-law, put the scale in numbers: a luxury business that has grown from Flannels into a "profitable £1 billion+ luxury ecosystem in just 10 years," with more than 100 stores across the UK and US.

Flannels is the foundation of that figure. It has been part of Frasers Group since 2017, was previously inside the group's Premium Lifestyle division, and now runs more than 80 stores across the UK focused on what the group calls "new luxury."

Harvey Nichols is the most recent and highest-profile purchase. The group's plans for it appear to include major investment in the London flagship as well as Manchester and Edinburgh, while reports suggest the Bristol and Leeds branches could be converted to Flannels, even though Leeds already has a major Flannels store.

The Webster was bought, as a majority stake, a year ago as Frasers Group's entry into the US luxury market. The company said it has kept investing in the retailer's store estate in Bal Harbour, South Beach and New York, and the Bal Harbour Shops West expansion will be unveiled next month as the nearest concrete step.

Alongside the three retailers, the group lists strategic investments across the wider luxury landscape: Mulberry, Burberry, Hugo Boss and Hulcan's Mile. It holds very big stakes in Mulberry and Hugo Boss, and a small stake in Burberry.

Murray said the ambition is clear: to keep scaling Frasers Group Luxury globally through organic expansion, acquisitions and strategic investments. He said the group has the expertise, scale and brand relationships to support that next phase, built on luxury being a core pillar for over a decade.

Julia Goddard, Harvey Nichols' chief executive, said Frasers Group gives the business the expertise, support and pace to build on its heritage. Its commercial approach, she said, gives Harvey Nichols the confidence to invest, evolve and build for the long term.

A luxury push that has not all gone smoothly

The luxury drive has not been trouble-free. Frasers Group bought Matches in late 2023 and Matches shut down relatively soon after. It has since been acquired by Hulcan ahead of a relaunch, and Frasers has itself invested in Hulcan, whose Mile is named among the group's holdings.

The group's largest luxury stake is in Germany, where Frasers holds nearly 48 percent of Hugo Boss, the German luxury brand known for apparel, accessories and fragrances. It secured a second board seat there as it moved closer to full control.

We reported that Murray was confirmed as Hugo Boss supervisory board chairman, replacing Stephan Sturm, who stepped down as Frasers tightened its grip on the company. Murray now leads the group's biggest luxury investment from the boardroom as well as the retail floor.

We also covered Mike Ashley's fresh push for a majority stake in Hugo Boss after his summer takeover attempt fell short. The retail division is a separate route into luxury from that campaign for control of the German house.

What the division is meant to do

Frasers Group said Frasers Group Luxury is meant to back brand partners at each stage of growth, from opening up opportunities and new audiences to entering new markets. Its portfolio, the company said, spans different expressions of luxury retail.

The company also pairs the expertise and reach of Frasers Group with the commercial discipline that underpins the wider business. That is the pitch to brands: a retail platform with scale in the UK and a growing foothold in the US.

The Bal Harbour Shops West unveiling next month is the nearest concrete step. The London, Manchester and Edinburgh investment at Harvey Nichols is the clearest signal of where capital goes first, and the division is now the vehicle for those decisions.

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Image: Frasers Group