Dickson Poon - The Asian Link

When the going gets tough, the tough go shopping.

And there are few tougher than Dickson Poon, the Hong Kong businessman. More than three years ago in the depths of the Asian financial crisis, he paid HK$1.53bn (128m) for the foreign assets of his publicly listed company Dickson Concepts and shifted them to a private group controlled by him and his family.

The global brands that went into the private firm included the stake in Harvey Nichols and ST Dupont of France.

Yesterday, Mr Poon appeared to have done it again, electing to take Harvey Nichols private at a time when few investors would want to bet on a luxury retailer.

Back in 1999, when Mr Poon did his last bit of high-profile financial re-engineering, Dickson Concepts had been hard hit by the Asian financial crisis. Mr Poon said the sale by Dickson Concepts of its non-Asian assets would allow it to benefit from the recovery in Asia, without being dragged down by the restructuring and increased investment in European assets such as Harvey Nichols.

Some sceptical bankers pointed out that minority shareholders of the Hong Kong-listed Dickson Concepts would have done better if outsiders rather than the controlling shareholder were buying the assets. But the deal went through without a hitch in May 1999, giving Mr Poon 52 per cent of Dickson Concepts.

In Hong Kong, where the rich really are famous, Mr Poon has maintained a relatively low profile in recent times. He works out of a nondescript office far from the bustle of the high-priced real estate in downtown Hong Kong. He has been applauded for managing his retail empire conservatively, even as many Asian retailers like the Japanese Yaohan bit the dust in the aftermath of the Asian financial crisis.

Marc Faber, a prominent investment consultant in Hong Kong, once described Mr Poon as an unusual entrepreneur: "Usually entrepreneurs go wild. Dickson doesn't buy things just for the prestige. It always has to make sense."

Mr Poon's business acumen aside, he has had his moments on the society pages as a former husband of the star of Crouching Tiger, Hidden Dragon fame, Michelle Yeoh.

He is known to be a natty dresser, but believes his stores and their customers are the final arbiters of fashion.

"It is not a question of my taste," he was once quoted as saying. "It is the taste of consumers that is important. My taste is unimportant."   - By Rahul Jacob in Hong Kong   Financial Times    19  Sept  2002


Dickson Poon, the millionaire Hong Kong businessman, is taking Harvey Nichols private...

Darling! Who doesn't love Harvey Nicks? Well, according to the man behind the up-market London-based department store, its City of London investors.

Dickson Poon, the Hong Kong-based businessman, yesterday announced plans to take Harvey Nichols back into private hands after claiming to have lost patience with shareholders who have been driving down the company's share price.

But the Knightsbridge fashionistas need not fret. Joseph Wan, chief executive of Harvey Nichols and Mr Poon's right-hand man in the UK, said it would be business as usual at the popular playground of celebrities, supermodels and the AbFab generation.

Always a byword for style, Harvey Nicks became a household name with the success of Absolutely Fabulous, the TV sitcom that showed Patsy and Edina frequently dropping in for a spot of retail therapy and a glass of bubbly.

But in spite of its high profile and the opening of stores outside London, Harvey Nichols has not enjoyed a good run on the stock market. After adding Harvey Nichols to his international retail empire in October 1991 in a 53m deal, Mr Poon floated 49.9 per cent of the business in London in April 1996.

He received 74m for his stake and stripped out the 35m freehold of the flagship Knightsbridge store. A flotation share price of 270p was only bettered for a few months, reaching a high of 372?p. Since the end of 1996 it has all been mainly downhill.

Mr Poon's offer to shareholders yesterday - made by his Broad Gain investment vehicle and which is being recommended by the Harvey Nichols board - is for 250p a share. That values the entire business at 137.5m.

Mr Wan said shares in Harvey Nichols had suffered in the late 1990s because of events outside its control - a City aversion to small companies and the knock-on effects of Marks and Spencer's troubles.

Harvey Nichols will now be part of Dickson Concepts, the retail group Mr Poon established in 1980. Shares in Harvey Nichols jumped on the news, closing up 61?p - more than 33 per cent - at 246p.

By Susanna Voyle, Retail Correspondent   Financial Times     19 Sept  2002

Harvey Nicks quits the City spotlight Still darling of the Ab Fab set

Joseph Wan, chiefexecutive of Harvey Nichols, insisted that it was business as usual at the Knightsbridge department store - despite news that its majority shareholder was taking it private.

Dickson Poon, the Hong Kong businessman with a stable of luxury brands, has decided Harvey Nichols should give up on the quoted sector. His offer of 250p a share for the 49.9 per cent he does not own represents a 35.5 per cent premium to the closing price on Tuesday - and is above the three-year high of 238?p.

In spite of his offer, Mr Wan - brought in by Mr Poon to run Harvey Nichols in 1992 - said his strategy remained the same. The group has adopted a high-fashion approach to the top end of the retail market. Designer names such as Alexander McQueen dominate the shop, and its celebrity fans ensure its place in the headlines.

The group has also expanded into restaurants and is trying to become a fashion brand in its own right with own-label developments. It has been pursuing a three-pronged approach to achieve this end. First, it has continued - and will continue to - roll-out full-size stores into the regions. Following last month's launch of a new store in Edinburgh, the next will open in Manchester city centre in about a year.

Secondly, the group is trying to develop a series of smaller shops stocking all Harvey Nichols own-brand goods - thus turning the name into a brand all its own.

Finally, Mr Wan is still searching for opportunities overseas to set up small Harvey Nichols stores after a successful foray into Saudi Arabia.

"This doesn't change any of our plans. Our strategy is totally unchanged," said Mr Wan, denying that the group is suffering too badly as growth in retail sales continues to slow.

"Currently trading is tough, related to tourist numbers being down," he said. "But that is the same situation faced by everyone in London."

The group has also branched out into food - opening restaurants Prism in the City and Oxo Tower on the south bank of the Thames, where diners waiting for their tables can peruse the own-brand food on the shelves.

But in spite of Mr Wan's confidence, analysts are more cautious about the outlook for department stores.

Harvey Nichols has faced strong competition from a resurgent Selfridges, which is also opening more regional stores. The new Harvey Nichols in Manchester will be right next door to the Selfridges opened in the city earlier this month.

While Harvey Nichols and Selfridges are targeted firmly at the top end of the market, Debenhams, Allders and House of Fraser are all planning expansion aimed at the middle market.

"Opening stores like this is heavily capital-intensive and in a consumer downturn there is no certainty about how they will perform," said one analyst.

The competitive environment is also becoming tougher. Some of the recent growth in department stores has certainly come at the expense of the underperforming high street names such as Marks and Spencer. But with M&S on the recovery track, it will now be competing for sales more strongly.

Out of the City spotlight, Harvey Nichols may now be better placed than its listed rivals to weather the high street storm.

Broad Gain, Mr Poon's investment vehicle, was advised by JP Morgan. Harvey Nichols was advised by NM Rothschild.

Any question that Harvey Nichols, the darling of the Absolutely Fabulous set, has lost its pulling power would have seemed ludicrous last week with the opening of its Jimmy Choo boutique.

Uber-celebrities, including Elizabeth Hurley and Geri Halliwell, turned up to swill champagne and air-kiss alongside top magazine fashion directors.

Although the store has had stiff competition recently from the remodelled Selfridges (known simply as the "S word" by loyal staff), Harvey Nick's has never failed to hold its own. Last week it launched a 22m store in Edinburgh - boasting the biggest collection of fashion labels in Scotland - and plans a similar coup for Manchester.

Its ability to negotiate exclusivity on big designer names is as strong as ever. Latest in the stable is Zac Posen, the new fashion darling from New York.

Part of the key to the store's success is its location, nestled in the heart of Knightsbridge, at the top of Sloane Street surrounded by designer stores. Its size is also an advantage. Compared to Selfridges's labyrinthian layout, Harvey Nichols is easy to navigate, with staff that welcome you as if you're much more than just an account card holder. The pop music-free Fifth Floor restaurant and caf is still a destination eaterie, classed in Harden's London Restaurant guide as "fun for girlie lunches".

Whatever competition comes its way, Harvey Nichols is more than a store, it's a top fashion brand in its own right. And in fashionland, its simple white shopping bag is still one of the chicest to be seen with.   -  By Susanna Voyle, Retail Correspondent, By Edwina Ings-Chambers    Financial Times    19 Sept 2002

 


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