The new owner of Harrods, Qatar Holding, is poised to push the button on overseas expansion, including a potential flagship Harrods store in Shanghai, following its £1.5bn acquisition of the Knightsbridge department store at the weekend.
Qatar Holding, the investment arm of the Qatar Investment Authority - the state-owned investment agency - is also considering developing a luxury online store and expanding the Harrods own-brand beyond the teddy bears and souvenirs for which it is known.
Ahmad Al-Sayed, chief executive of Qatar Holding, is also reportedly looking to make over the flagship store in London and expand its selling space.
Qatari Holding, which also has a 26% stake in grocer Sainsbury’s, bought Harrods from Mohamed Al Fayed after months of talks and in spite of repeated denials by Al Fayed of a sale. Al Fayed is believed to have agreed the sale only after the Qataris agreed to underwrite the long-term growth of Harrods.
Al Fayed’s colourful and controversial 25 year relationship with the retailer will continue, with him taking up the role of honorary chairman.
Managing director Michael Ward is also understood to be retaining his position at the store.
Al Fayed and his brother Ali took control of House of Fraser, which then owned Harrods, in 1985 after a bitter takeover battle, for £615m. Al Fayed claims to have invested more than £400m restoring Harrods. The company is thought to have £600m of debt.
Al-Sayed told reporters that the acquisition of Harrods was part of a strategy to buy “prestigious top-performing businesses and to buy them at the right point in the cycle”.
Aided by the weak pound and wealthy tourists, the store saw record sales of £752m in the year to the end of January 2009.
The deal was brokered by Lazard International.
The Harrods story
1849: Charles Henry Harrod, a tea merchant, opens a grocery store in Knightsbridge
1889: Company floats on stock exchange
1959: Bought by House of Fraser
1985: Al Fayed takes control of House of Fraser in a £615m deal
1987: Al Fayed spends £300m on five-year refurbishment
1994: House of Fraser goes public but Al Fayed retains ownership of Harrods
2010: Qatar Holding buys Harrods for a reported £1.5bn