Happy days for Mohamed Al-Fayed: he's agreed to sell London department store (/tourist trap) Harrods to the Qatari royal family, for an estimated £1.5bn - and could apparently pocket about £900m of this himself. Not a bad retirement nest-egg. Meanwhile the cock-a-hoop Qataris have big plans for their latest trophy asset - including a possible new store in Shanghai. Will they have a life-size waxwork of Al-Fayed in too?
Now you'd be forgiven for being slightly taken aback by this deal. After all, it was only two weeks ago that Al Fayed insisted he would never sell. ‘People approach us from Kuwait, Saudi Arabia, Qatar. Fair enough. But I put two fingers up to them all. It is not for sale,’ he declared. Hmm. We wonder what suddenly made him see the attractions of retirement? A big fat cheque like that would certainly make us think twice (he prised Harrods from the grasp of Tiny Rowland for £615m in 1985, so even after he's paid off the banks, he should be left with the best part of £900m).
As for the Qataris, the FT reckons they're already eyeing Shanghai as a suitable location for another large Harrods store; they've ordered a three month review of the business, and exporting the brand overseas is one option being explored. Others include developing a luxury online store, expanding the Harrods brand beyond souvenirs for the mass market (whatever that means) and renovating the London flagship store to try and expand selling space. With a bit of luck, that will include scrapping that hideous waxwork, not to mention the ghastly Egyptian room and the memorial to Dodi and Diana.
Nonetheless, despite Al-Fayed's undeniable eccentricities, the continued success of Harrods during his tenure suggests that he actually has a pretty good feel for what its customers want. So as well as the bling (and the occasional monstrosity), he's also stayed reverently true to old Harrods traditions like the Food Hall. The Qataris do have experience of British businesses – they already part-own Sainsbury’s (Harrods Local, anyone?), Barclays Bank, and a property empire that includes Canary Wharf. But will they have the same instinctive feel for retail? There's not a great deal in their investment portfolio to suggest as much.
Al-Fayed himself - who's expected to stay on as honorary chairman - seems to think we shouldn't worry; apparently, Qatar was ‘specifically chosen’ because he believed it had ‘the vision and financial capacity’ to ensure the long-term future and success of the brand. (And not just because they were prepared to write the biggest cheque - oh no). But if not, at least he has a hard-earned £900m worth of consolation.
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