Industry News

Harrods sold for £1.5 billion

Harrods, the world famous department store, has been sold for more than £1.5bn to the Qatari royal family. Mohamed al-Fayed, The Egyptian owner, will hand over the keys to Qatar Holding – however he will remain on as honorary chairman.

According to The Times, Qatar Holding was chosen because they would "maintain the traditions of Harrods", said Ken Costa, chairman of Lazard International - the investment bank advising the Fayed family trust on the deal.

The Qatari prime minister Sheikh Hamad Bin Jassim Bin Jabr al-Thani, the firm’s chairman, promised to make the store “even greater and better”.

“It’s a historical place. I know it’s important, not only for the British people but it is important for the tourism. What I can assure you is that Qatar Holding will do their best to upgrade this monument to make it even greater and better.”

He said the responsibility of owning “a very important monument” was a “heavy burden”, and within three months the new owners would create a “road map” to make Harrods “more impressive”.

Asked if he had ever shopped at Harrods, he joked: “If the shop will have customers like me I don’t think Harrods will make profit, but maybe if it’s my wife, yes.”

Harrods attracted advances from Gulf-based suitors in the last two months, but Fayed initially offered them “two fingers” in a vehement refusal.

“People approach us from Kuwait, Saudi Arabia, Qatar. Fair enough, but I put two fingers up to them all,” Fayed said last month.

“It is not for sale. This is not Marks & Spencer or Sainsbury. It is a special place that gives people pleasure. There is only one Mecca.”

"After 25 years as chairman of Harrods, Mohamed al-Fayed has decided to retire and to spend more time with his children and grandchildren,” Costa said.

Costa said the Fayed family trust agreed to sell because Qatar Holding had “both the vision and financial capacity” to support the long-term growth of Harrods.

Fayed “wished to ensure that the legacy and traditions that he has built up in Harrods would be continued”, he added.

The Egyptian has invested around £400m in the Knightsbridge icon to restore it to its former glory, including £75m for an Egyptian-themed escalator flanked by sphinxes.

Qatar Holding, which handles investments for the Middle Eastern state’s royals, will become the fifth owner of Harrods since its creation in 1840.

It already has a stake in Sainsbury’s and in Songbird Estates, which owns most of Canary Wharf.

The firm hailed the acquisition as “truly magnificent” and a “privilege”. Vice-chairman Dr Hussain Ali Al-Abdulla said: “Such a rare opportunity does not arise every day.”