London department store Harrods has been sold for £1.5billion following owner Mohamed al Fayed’s decision to retire.
Just weeks after insisting the exclusive Knightsbridge store was not up for sale, Mr al Fayed reconsidered and agreed to an offer from the Qatari royal family.
The new owners were chosen because they would ‘maintain the traditions of Harrods’.
Mohamed Al Fayed (right) with the Prime Minister of Qatar Sheikh Hamad Bin Jassim Bin Jabr Al-Thani inside Harrods today
Ken Costa, chairman of Lazard International which advised the al Fayed family on the deal, said: ‘After 25 years as chairman of Harrods, Mohamed al Fayed has decided to retire and to spend more time with his children and grandchildren,’ he told Sky News.
He has built Harrods into a unique luxury brand with worldwide recognition.
‘In reaching the decision to retire, he wished to ensure that the legacy and traditions that he has built up in Harrods would be continued, and that the team that he has built up would be encouraged to develop the foundations that he has laid.
MOHAMED AL FAYED
Egyptian born multimillionaire Mohamed al Fayed is one of Britain’s most high-profile businessmen.
The 77-year-old set up a shipping company with his brothers in Egypt in the late 1950s before setting up offices in London and moving to Britain in 1974.
Al Fayed and his brothers purchased a 30 per cent stake in the House of Fraser, which included Harrods, in 1984 and bought the remaining stake from business magnate ‘Tiny’ Rowland after a bitter, long-lasting battle.
Al Fayed’s UK business interests include the Premiership football club Fulham FC, which he bought in 1997.
His wealth was recently estimated at £650million.
He is also well-known for his 10-year campaign to prove that Princess Diana and his son Dodi, who died in a car crash in Paris in 1997, were murdered in a conspiracy.
These claims were dismissed in the 2008 inquest into their deaths.
Despite living in the UK for more than 30 years he has repeatedly been denied a British passport.
‘Qatar Holding (QH) will become only the fifth owner of Harrods since its creation, in 1840. Qatar Holding was specifically chosen by the Trust as they had both the vision and financial capacity to support the long term successful growth of Harrods.
‘Of paramount importance to Mohamed al Fayed was to ensure that the Harrods staff would find in QH an owner who would be supportive of their efforts to maintain the traditions of Harrods.’
Qatari prime minister Sheikh Hamad Bin Jassim Bin Jabr Al-Thani was given a short tour of the store by Mr al Fayed today and declared the store would be made ‘even greater and better.’
He said he was ‘very happy with the transaction’, and continued: ‘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 for the tourism and also for the British people.’
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.’
Mr al Fayed, who is not normally publicity shy, stood to one side away from the cameras as the prime minister addressed reporters.
It is understood that Qatari Holdings made an approach for the store several weeks ago but Mr al Fayed rejected the offer.
At the time Mr Al Fayed insisted the store was not for sale, but would not confirm or deny that any bid talks had taken place.
However the owner of Fulham FC had reconsidered the approach.
In March Harrods admitted it had written to staff to reassure them that the business would not be sold in the face of ‘ gossip’ about a potential deal.
Sold: Harrods has been bought for £1.5billion by the Qatari royal family
At the time a Harrods spokesman said: ‘We do not comment on rumours or speculation. That is neither to confirm nor deny that any discussions have taken place to sell the store.
‘However, for some time we have been aware of gossip circulating over a possible sale, and we took the decision to reassure staff this morning that this was not the case via a store-wide announcement.
‘We are happy to confirm that Harrods is not for sale and is not being sold.’
Harrods was founded in 1834 as a wholesale grocery shop in the less than salubrious Stepney area of East London by Charles Henry Harrod, who had a special interest in tea.
Mohamed al Fayed (4th left) with members of new owners Qatar Holding and Prime Minister of Qatar Sheikh Hamad Bin Jassim Bin Jabr Al-Thani (3rd left) inside Harrods today
He moved, in 1849, to a small shop on the site of the current store to escape the crime and vice of the East End, and to capitalise on trade from the Great Exhibition of 1851 in nearby Hyde Park.
The current store stands on a 4.5 acre site on Brompton Road in prestigious Knightsbridge, and has more than 1m square feet of selling space, spanning more than 330 departments.
Harrods is not the only Western trophy asset to interest the Qatari royals.
The state investment arm also owns 26 per cent of Sainsburys, 15 per cent of the London Stock Exchange, 7 per cent of Barclays, and 24 per cent of Canary Wharf developer Songbird Estates.