Harvey Nichols joins the Frasers empire
In August, Frasers Group acquired luxury retailer Harvey Nichols from administrators, FTI Consulting, for £43.3 million. As part of the acquisition, Frasers also acquired Harvey Nichols’ six department stores across the UK, its online business, current inventory and more than 1,000 employees.
Before the deal was executed, Harvey Nichols’ owed £270 million to its suppliers. Since Covid, the luxury retailer has struggled through difficult market conditions and reported a loss of £59 million in revenue in the year to March. It is estimated that unsecured creditors – including Canada Goose, Chloe, Victoria Beckham and Coach – will only receive up to 15% of money owed, whilst preferential creditors (including HMRC and employees) will be repaid in full. As a result, the takeover of Harvey Nichols has attracted criticism, including from Paul Smith executive chairman, Ewan Venters, who described the deal, which leaves creditors carrying unpaid debts, as ‘dubious’.
Frasers already owns Sports Direct, Flannels and House of Fraser, and is currently eyeing a majority takeover of German fashion brand Hugo Boss. Frasers CEO, Michael Murray, said that Harvey Nichols is a ‘British institution with significant potential’ but considerable change is needed to ‘create a stronger and more sustainable Harvey Nichols for the long term’. Strategically, the acquisition strengthens Frasers’ positioning alongside Flannels and its American luxury retailer, The Webster.
Harvey Nichols has since relaunched its website and resumed online trading under Frasers Group ownership, following a hiatus in August. Only time will tell whether the acquisition marks a turning point in Frasers’ long-running pursuit of a meaningful foothold in the luxury sector.
From losses to luxury: Victoria Beckham’s first ever profit
Victoria Beckham’s fashion and beauty business, Victoria Beckham Holdings, has recorded its very first operating profit since it was founded in 2008. It announced profit of £7.3 million for 2025 with revenue rising 15% to £129.8 million, marking a ‘considerable milestone’ for the brand.
The Netflix documentary released last year, Victoria Beckham, shone a spotlight on the financial difficulties the business had gone through, including that the company had once been ‘tens of millions in the red‘. Beckham herself admitted that the business had previously spent money at a ‘mindblowing’ waste, including a reported £70,000 a year on office plants.
The brand has since had a solid profit turnaround. Ready-to-wear saw ‘strong double-digit growth’, but the recent profit driver can be credited to the company’s skincare and beauty range which launched in 2019. This delivered ‘one of the strongest performances to date’, led by the popular Foundation Drops which had 25,000 people on a waiting list this summer and doubled the size of the skincare part of the business alone.
In line with its recent success, the brand opened its first store in New York in September 2026, marking its first permanent bricks and mortar store in the US and following a Miami pop-up earlier this year. This is alongside the flagship store in London’s Mayfair, and a presence in 230 stores worldwide. Chairman of Victoria Beckham Holdings, David Belhassen, commented that with fashion and beauty booming and an increasing international footprint, the business is now ‘powerfully positioned for its next phase of profitable growth’.
China’s luxury market: recovery under pressure
China’s luxury market started 2026 with signs of recovery, but recent figures suggest that momentum is fading. Sales across the country’s 25 largest luxury brands reportedly fell by more than 10% year-on-year in July, affecting major labels including Louis Vuitton, Dior and Gucci.
Tighter tax and capital controls – including over cross-border financial transactions – are also putting pressure on China’s wealthier consumers, while falling stock prices have weakened confidence. Affluent shoppers are therefore more cautious about spending on luxury goods, and are also becoming more selective. It is reported that China’s wealthiest are moving away from expensive handbags and fashion towards more accessible purchases including premium beauty products.
Reports have also pointed to China’s ongoing property crisis as a factor influencing consumer spending. Falling property values and high levels of household debt have weakened consumer confidence and left many with less disposable income for non-essential purchases, with the impact extending beyond luxury goods to all areas of discretionary spending.
This shift comes after mainland China’s personal luxury goods market contracted by 3% to 5% in 2025. While this was a considerable improvement on the previous year, the latest slowdown has raised questions about the strength of the recovery, and whether problems may be more deeply rooted.
For global luxury brands, weaker Chinese demand also means greater reliance on other markets, particularly the US, which is currently helping to drive global luxury growth.
London Fashion Week
London Fashion Week spring/summer 2027 struck a more confident note this season, pushing back against questions over its place in an increasingly globalised luxury industry. Beyond the headline shows was a notable emphasis on commercial performance. The British Fashion Council reported a 19% increase in accredited buyer attendance and a 41% increase in international buyers, suggesting renewed confidence in London as a marketplace as well as a creative hub. Long regarded as fashion’s leading incubator of creative talent, the event showcased a new generation of emerging designers, highlighting London’s ‘distinctive position as a global home of creative talent’.
The week’s narrative of renewal was reinforced by the return of two major British fashion houses to the London schedule: Alexander McQueen, showing in the capital for the first time in 25 years, and Christopher Kane’s highly anticipated first collection for Mulberry. The event also saw the inclusion of major high street names such as M&S and H&M. The event closed with a strong showing from Burberry, underlining a broader message that London’s biggest luxury brands are once again investing in the city alongside the next generation of design talent.
That shift comes at a time when several British luxury brands are demonstrating tangible signs of financial progress. Alongside the turnaround at Victoria Beckham, Mulberry recently reported an improving trading performance – with revenue rising by 4% in the year up to March 2026 – while Burberry has begun to show encouraging results from its ongoing recovery strategy, with operating profit rising to £126 million. These developments point to a broader trend within the UK fashion sector: a renewed focus on building sustainable, profitable businesses capable of competing on the global stage.
