The contrasting fortunes of Harrods, Harvey Nichols, Fenwick and John Lewis & Partners highlight how sharply the UK department store channel is diverging. While Harrods has returned to profit, Fenwick is showing early signs of a turnaround and John Lewis & Partners is undergoing a strategic reset under new leadership.
Harvey Nichols, by contrast, is in decline, underscoring the challenges facing the department store format. Yet, the success of its competitors suggests that, with the right strategy, the faded retail icon could become relevant again under new owner Frasers Group, according to GlobalData.
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Harrods’ return to profit, alongside turnover of £1.08bn in FY2025/26, demonstrates the resilience of ultra-luxury department stores, where affluent customers and international demand provide greater protection from domestic economic pressures. This is insulation by customer base, rather than strategy, which does not translate to the mid-market.
Harvey Nichols’ 11% revenue decline in FY2025 highlights the vulnerability of the mid-to-premium department store model, which lacks the international customer base and exclusivity of ultra-luxury, while competing for domestic shoppers who have more accessible alternatives.
Dora Punk, retail analyst at GlobalData, comments: “Once one of the most distinctive names in British retail, Harvey Nichols was bold, culturally relevant and a place to discover products that could not easily be found elsewhere. That distinctiveness has eroded as the retailer became less innovative, while its competitors continued to invest in experiences, emerging brands and exclusive collaborations, leaving the retailer vulnerable to becoming another collection of luxury concessions that consumers can access directly from the brands themselves. Harvey Nichols’ decline was driven by the loss of a reason for shoppers to visit.”
Fenwick and John Lewis & Partners equally illustrate two different routes back to relevance. Fenwick’s operating losses narrowed by 40% and like-for-like sales grew 2.5% in FY2025/26, driven by distinctive British collaborations, while John Lewis & Partners is investing £800million in its store estate as part of a wider strategic reset under new leadership.
Punk continues: “Fenwick’s strengthening profit demonstrates that a differentiated proposition can gain traction even in a difficult market, while John Lewis & Partners’ reset reflects a wider shift across the retail channel towards reinvesting in physical stores and making them destinations that customers actively want to visit.
“Department stores cannot simply broaden their ranges to capture more sales; they need a more curated offer with products and experiences that customers cannot find elsewhere. Services such as cafes and personal styling can enhance this but cannot make up for an uninspiring core offer.”
The challenge is to give customers a reason to visit beyond the transaction, through pop-ups, events and digital initiatives that extend the in-store experience, while strengthening the product offer with exclusive ranges, emerging designers and limited-edition collaborations.
Punk concludes: “Fenwick shows that mid-premium department stores can retain relevance by creating a distinctive proposition through collaborations and experiences that generate buzz and footfall. Under new ownership, Frasers Group must make Harvey Nichols distinctive and exciting again, rather than shrinking the estate or leaning into value.”
