After denying for years that he planned to sell the iconic Harrods department store, Mohamed al-Fayed has done just that. Last week, Harrods announced it had to been sold to an investment group, Qatar Holding, representing the royal family of Qatar, for £1.5 ($2.3) billion.
As for his change of heart, the 81-year-old Mr. Fayed said he had decided that the time was right to spend more time with his children and grandchildren. He will continue as honorary chairman of Harrods.
According to a report in London's The Sunday Times, Mr. Fayed had called off negotiations in the past month after Qatar Holding had balked at the £2 billion he was reportedly asking for the business. He was finally persuaded to accept the lower offer after the new owners agreed "to underwrite the long-term growth of Harrods and protect the pay and pensions of its 5,000 staff."
Ken Costa, chairman of asset managers Lazard International, who advised the Al Fayed family on the sale, told BBC News, "In reaching the decision to retire, [Mr. Fayed] 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."
Qatar Holding has given no official indication of any major changes planned for Harrods but said it would bring in advisers as it created a "road-map" for the building the business. A report by the Financial Times suggests that possible changes would be revamping the Knightsbridge store to increase the amount of selling space. Other possibilities include building up the chain's website to expand its business online and building a second location in Shanghai to serve Southeast Asia.
Sheikh Hamad bin Jassim bin Jabr Al-Thani, prime minister of Qatar and chairman of Qatar Holding, said, "I know it's important not only for the British people but for tourism and London and Britain. I can ensure that Qatar Holding will do their best to upgrade this monument to make it even greater and better for the tourism and for the British people."
Qatar Holding is buying an upscale icon that has managed to prosper even in the face of a recession that has hit its customers from the U.K. and abroad. Harrods, with its All Things for All People, Everywhere motto, attracts roughly 15 million customers every year.
Discussion Questions: If you were buying Harrods, what would you do with the iconic department store?