LONDON — Mohamed al-Fayed agreed Saturday to sell the London luxury department store Harrods to Qatar Holding, adding another well-known brand to the emirate’s investments.
Mr. al-Fayed, 77, who until recently vowed not to sell the store, would retire and become honorary chairman of Harrods. He agreed to sell the retail landmark in London’s Knightsbridge district after Qatar pledged to keep investing in the business and to safeguard its employees’ pensions, Mr. al-Fayed’s adviser said.
Qatar Holding, a sovereign wealth fund chaired by the country’s prime minister, paid more than $2 billion for Harrods, which also includes a real estate and a helicopter charter business, some newspapers reported. The fund’s other investments include some skyscrapers in London’s financial district, Canary Wharf, and stakes in British lender Barclays, supermarket chain J Sainsbury and the London Stock Exchange.
“It is a privilege for us to acquire Harrods, a unique company that combines an iconic luxury brand and one of the most prestigious retail properties in the world with best-in-class financial metrics,” Ahmad al-Sayed, chief executive officer of Qatar Holding, said in a statement.
Mr. al-Fayed bought the Harrods store in 1985 and immediately put his own mark on the business, including erecting a life-size wax figure of himself inside. Under his reign Harrods grew and attracted a flow of celebrity clients. It continued to operate under the motto, “Omnia, Omnibus, Ubique,” — all things for all people, everywhere.
But the store faced fierce competition from rival Harvey Nichols across the road, especially for customers from the Middle-East and Europe, who had flocked to the stores over the last year to take advantage of the relatively weak pound. The economic crisis also left its mark on the British retail industry. Another London luxury department store, Liberty, said earlier this year it received some approaches that could lead to a takeover.
Ken Costa, chairman of Lazard, the investment bank that advised Mr. al-Fayed on the sale, said that “after 25 years as chairman of Harrods, Mohamed al-Fayed has decided to retire and to spend more time with his children and grand-children.” Mr. Costa said in a statement that “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.”
Besides Harrods, Mr. al-Fayed also dedicated time to a 10-year campaign to find evidence that the car crash that killed Princess Diana and his son Dodi in Paris in 1997 was a conspiracy to murder. He also fought British politicians after being repeatedly refused a British passport even though he had lived in Britain for years.
Harrods was founded by Charles Henry Harrod in 1834 as a wholesale grocery shop in east London. The store moved to a smaller site at its current location in 1849 when Mr. Harrod wanted to escape the crime of London’s east end and benefit from trade from the Great Exhibition.
