Harvey Nichols’ Birmingham store is to close in January with the loss of at least 60 jobs, as its owner Frasers Group begins reshaping the department store chain it bought out of administration in August.

Staff at the store, which opened 25 years ago, were informed this week, according to the fashion trade journal Drapers, which first reported the plan. The Leeds and Bristol stores are to be rebranded as Flannels, the luxury fashion chain owned by Frasers.

The future of the remaining three UK stores, in Manchester, Edinburgh and at the chain’s Knightsbridge headquarters in London, is unclear.

Mike Ashley, whose Frasers Group also owns Sports Direct, previously said he would keep the Knightsbridge and Edinburgh stores but rebrand the four others, in Birmingham, Leeds, Manchester and Bristol, as House of Fraser or Flannels.

Frasers paid £43m for Harvey Nichols on the day the chain was put into administration in mid-August. The deal saved six UK stores and about 1,000 of the group’s 1,200 jobs. The Oxo Tower restaurant in London was sold to a separate buyer, saving a further 130 jobs.

A seventh store, in Dublin, was closed by administrators in September. Outside the UK, the Harvey Nichols name also trades in Riyadh, Dubai, Doha and Kuwait, and at two stores in Hong Kong.

When it bought the business, Frasers said it would review and “rationalise” the store portfolio, organisational structure, operating model and cost base.

Michael Murray, the Frasers chief executive, said at the time: “The turnaround will require tough choices, and we are prepared to make those decisions, even if that means a smaller business in the near term, to create a stronger and more sustainable Harvey Nichols for the long term.”

The closure follows the publication of filings setting out the position of the chain’s creditors. Companies House documents show that the main trading entity, Harvey Nichols and Company, went into administration owing £270.5m to unsecured creditors, with the administrators, FTI Consulting, estimating that no more than 15 per cent would be returned.

The brands owed money include Canada Goose and Victoria Beckham.

Frasers has been building its interests in luxury fashion through Flannels and through large stakes in brands such as Mulberry, the British handbag maker.

In a recent statement about the group’s luxury division, Murray said: “Our ambition is clear: to continue scaling Frasers Group Luxury globally through organic expansion, acquisitions and strategic investments, creating long-term value for our brand partners, customers and the group.”

The group has also lifted its stake in Hugo Boss to 48 per cent, just short of control of the German label. The Hugo Boss managing and supervisory boards recommended on 9 July that shareholders reject the Frasers takeover offer, saying the price was “inadequate from a financial point of view”.

Ashley, who started out with a single sports shop, has bought a series of struggling premium brands in recent years. Frasers bought House of Fraser out of administration in 2018 and has since closed about 40 of that chain’s 60 stores.

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