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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 ý53m deal, Mr Poon floated
49.9 per cent of the business in London in April 1996.
He received ý74m for his
stake and stripped out the ý35m 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 ý137.5m.
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 ý22m 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
cafý 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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