Mohamed Fayed’s Harrods 25 Year Reign sold to Qatari Royal Family

Ahmad Al-Sayed, chief executive of Qatar Holding; the investment arm of the royal family, also owning a 26% stake in Sainsbury’s has indicated the acquisition is the start of a strategy to buy “prestigious top-performing businesses and to buy them at the right point in the cycle”.

The new owners are considering taking the brand overseas and creating a replica of the most famous store in the world in the Chinese city of Shanghai and are also looking to open new branches in various other centres where the brand is particularly strong.

As to not jeapordise the exclusivity of the store, the replica institutions will be a minimum of a 10 hour flight from the flagship store as if other Harrods stores start featuring ini other areas of the UK, particularly in a recession could damage its heritage and have a negative effect on customers and sales. Many of Harrod’s biggest clients tend to shop in store on a dedicated shopping trip from various other fashion capitals including Moscow and New York.

The Qataris may also wish to pursue alongside the online consumer boom and develop Harrods own luxury website targeting customers beyond their loyal iternational market visiting for the experience and as a tourist to open up sales to the entire world. The weakened pund has also seen tourist sales shoot up in the capital, indicating a great time for new owners to capitalise on the potential growth.

The price paid is double the stores annual income based on the 2009 revenues of £752million as seen within the most recent set of accounts, and is likely to continue to grow under the new expansion plan and increasing availability of its products online. This is the largest retail deal since the £11.1billion takeover of Alliance Boots in 2007 and has beaten all retail sales over the whole of 2009 according to Bloomberg.

Could this be the move required to reignite consumer spending and regain confidence in the pound? Analysts have also speculated the sale could encourage other foreign investors to buy into British high street property utilising the current state of sterling and further assist our economy.