Harvey Nicks set for biggest sale ever - on Stock Exchange

A local favourite prepares to leap into the world market, writes Nigel Cope
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The smartly dressed "ladies who lunch" who shop at Harvey Nichols will soon be able to buy shares in the Knightsbridge store in London after the company announced plans to float on the stock market yesterday.

The flagship fashion emporium, which was acquired by a Hong Kong group five years ago, is set to raise up to pounds 80m to fund ambitious expansion plans. These include opening regional branches in locations such as Manchester, Glasgow and Edinburgh in addition to the Leeds branch which is set to open this autumn. International expansion is also expected with branches in New York, Paris and Tokyo.

The expansion into the provinces follows similar moves recently announced by Selfridges, a rival department store. A Manchester Selfridges is set to open in 1998 in addition to smaller outlets in airports.

Harvey Nichols, affectionately known as "Harvey Nicks" to its well-heeled clientele, also plans to expand its restaurant interests following the successful opening of a chic bar and brasserie on the fifth floor of the Knightsbridge shop. It is due to open a restaurant on the top floor of the Oxo tower near London's Festival Hall this summer. With glass walls and spectacular views over London, the restaurant is tipped as the capital's next trendy gastrodome following in the footsteps of Quaglino's and Mezzo.

However, Clive Vaughan of retail consultants Verdict Research, said: "I don't think they are raising this money to open restaurants and there aren't many locations in Britain that could support a branch of Harvey Nicks. My guess is that they will expand the Harvey Nichols brand internationally."

The store has performed well since it was acquired in 1991 by the Hong Kong retail magnate Dickson Poon for pounds 60m. When he bought Harvey Nichols from the Burton group it was losing pounds 150,000 on sales of pounds 54m. Since then the store has closed some departments, such as carpeting, and concentrated on fashion concessions, specialising in top designer names such as Ralph Lauren, Donna Karan and Giorgio Armani.

The store has a string of celebrity shoppers, including the Princess of Wales. The actresses Joanna Lumley and Jennifer Saunders have also used the store for shopping binges in episodes of the television comedy Absolutely Fabulous.

Harvey Nichols was founded in 1813 but did not move to its present location at the Knightsbridge end of Sloane Street until the 1880s. It was acquired by Debenhams in 1919 then became part of the Burton Group when Sir Ralph Halpern's company bought Debenhams in 1985. It passed to Dickson Poon five years later.

Mr Poon, who was educated at Uppingham school in Leicestershire, started out with a HK$5m (pounds 424,000) loan from his father. He has since snapped up the rights to up-market Western brands such as Hermes and Charles Jourdan. His company Dickson Concepts also includes ST Dupont, the French lighter and pens company. Mr Poon added to his high profile a few years ago, and raised some eyebrows, when he hired six topless dancers to entertain guests at his company's 10th anniversary party.

Under the terms of the flotation, Mr Poon is selling just under half his stake in Harvey Nichols. The company has not yet set a date for its stock market listing but the float should value the company at about pounds 160m. Its proximity to Harrods meant that Harvey Nichols has often been overshadowed by its more famous competitor, but the store has nevertheless developed a loyal following, among its credit-card wielding power-dressed clientele, for its high-quality goods and personal service.

Harvey Nichols is not the only department store to have enjoyed mixed fortunes in recent years. While the John Lewis Partnership and Selfridges have powered ahead others such as House of Fraser have struggled as the battle at the top end of the retail market becomes increasingly competitive.