Mike Ashley’s Frasers Group has acquired Harvey Nichols following the troubled department store chain’s collapse into administration.

Executives at Sports Direct owner Frasers stated they will oversee a turnaround at the historic chain, which could become a "smaller business" in the short-term.

The transaction follows an auction process for Harvey Nichols that saw Frasers battle retail rival Next to take control of the brand.

Earlier this week, Harvey Nichols warned in its latest accounts that it would need to "cease trading" within a year if it failed to secure fresh funding.

The deal encompasses the retailer's estate of six stores in Knightsbridge London, Manchester, Birmingham, Bristol, Leeds and Edinburgh.

Frasers Group’s chief executive Michael Murray said: “Harvey Nichols is an iconic British institution with significant potential, but it is clear meaningful change is needed.

“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.”

Frasers Group has recently sought to take over Hugo Boss, which already holds approximately 26 per cent of the German fashion house. The offer proposed paying around €1.98 billion (£1.73 billion) for the remaining shares, equating to €38 per share.

The Frasers Group, which also owns House of Fraser and Flannels, reported that group revenues jumped by 8.7 per cent to £5.33 billion in the year to 26 April, compared with a year earlier.

This was supported by rapid growth in its international retail arm, on the back of acquisitions last year.

International revenues surged by 59.2 per cent to £1.6 billion, amid boosts from takeover deals for brands including Holdsport in South Africa and XXL in Norway.

Frasers is continuing to seek growth through takeovers, having offered to pay around €1.98 billion (£1.73 billion) for the 74 per cent of the business it does not already own.

Meanwhile, its UK sports retail division saw revenues fall by 4.7% year-on-year to £2.57 billion.

Bosses said the group’s growth strategy, which has seen it grow its luxury brands and snap up competitors, has been positive but highlighted weaker consumer confidence.