• Thu
  • Nov 27, 2014
  • Updated: 2:54pm

Dickson Poon eyes Harrods

PUBLISHED : Monday, 02 June, 2003, 12:00am
UPDATED : Monday, 02 June, 2003, 12:00am

The millionaire could end up controlling UK's two best-known luxury retailers


Hong Kong businessman Dickson Poon has emerged as a potential buyer for London luxury retailer Harrods, according to British press reports.


Mr Poon, who privatised his British-listed arm Harvey Nichols six months ago, is regarded as one of the possible buyers for a stake in the famous Knightsbridge department store, the Observer reported.


Harrods owner Mohamed al-Fayed is reportedly sounding out potential purchasers. Seven years ago, it is understood he turned down a #2 billion (HK$25.72 billion) offer. Retail analysts have pegged Harrods' present value in the region of #150 million to #500 million.


The London icon has been hit by falling profits as fewer United States tourists visit following September 11 and the Iraq war.


Harvey Nichols's chief executive Joseph Wan, Mr Poon's right-hand man, has privately expressed an interest in Harrods' availability and price in the past fortnight, according to the Observer.


It said Mr Wan, who recommended Mr Poon buy Harvey Nichols in 1991, made no secret of the aim to go international, but so far this had been limited to building a global name for the high-end British retailer. Mr Poon purchased Harvey Nichols for #53 million.


Harvey Nichols and Dickson Concepts could not be reached for comment. As Mr Poon's Hong Kong-listed asset Dickson Concepts (International) has a market value of HK$448 million, the multi-millionaire could be in a position to take on a bigger deal. Mr Poon privatised Harvey Nichols in a #137.5 million deal in December.


Speculation has been rife that Mr Fayed is seeking buyers after the Egyptian owner said he would move to Switzerland, having lived in Britain for 30 years.


For the year to February 2, Harrods' operating profit fell 20 per cent to #26.7 million, while its sales jumped 1.4 per cent to #533.9 million. It had debt of #311.2 million. A #333 million mortgage was taken out on the store two years ago. This would be deducted from any asking price.


Interest in buying the store has also reportedly been expressed by Selfridges owner Galen Weston and Bhs and Arcadia owner Philip Green. Britain's Sunday Express reported that private investment firm Lazard had been trying to assemble an investment group to buy and merge Harrods and Selfridges, which was taken over by Mr Weston for #628 million last month.


Mr Poon is famous for buying distressed assets and privatising at a low price. In 1999, he took over Dickson Concepts' European assets including Harvey Nichols, ST Dupont and Tommy Hilfiger for HK$1.52 billion, giving his company an exceptional gain of $320 million.


The following spring, Mr Poon sold the freehold of his Knightsbridge store site for more than $828 million, which he bought for $605.5 million as part of a privatisation of the non-Asian assets.


Last September, Mr Poon proposed buying the remaining 49.9 per cent of Harvey Nicolas he did not own at 250 pence, a 40 per cent premium to its price three years ago. Mr Poon proposed the bailout to shareholders at a time when he spearheaded a significant expansion into Manchester, Birmingham and Leeds.


Shares of Dickson Concepts jumped 57.65 per cent last month on hopes that Mr Poon would take the Asian retailer private at a low valuation. The counter closed at $1.75, down 15.51 per cent in the past 12 months.


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