Upscale department store group Harvey Nichols on Thursday revealed it has agreed to a £137.5 million buyout by its chairman, Hong Kong businessman Dickson Poon, and his family.

Mr Poon acquired the group 11 years ago for £53m but then floated 49 per cent of it in 1996. His company Broad Gain UK is now offering 250 pence per share - 35.5 per cent premium over Tuesday's close - for that stake.

Harvey Nichols is one of the country’s most famous retailers with its flagship store in London’s fashionable Knightsbridge district and additional outlets in Leeds and Edinburgh and a small boutique store in Birmingham.

However it was hit hard by the tourism slump triggered by last year’s terrorist attacks in the US and in June posted a 20 per cent slide in annual profits to £12.5m from £15.6m in 2001.

Commenting on his bid, Mr Poon said: "We are delighted to put forward this offer for Harvey Nichols. Due to its small market capitalisation and relative stock illiquidity, Harvey Nichols is not realising any material benefit from its listing.

"Consequently, we believe that minority investors will welcome this opportunity for a cash exit at a substantial premium."