(FORTUNE Magazine) – Mohamed Al Fayed, the Egyptian-born owner of Harrods, has his share of troubles. His Fulham soccer club is in debt. In March he lost a fight to retain special tax status in Britain and moved to Geneva. He has failed in several attempts to obtain British citizenship. Then there's the ongoing trauma from the death of his son Dodi in the 1997 Paris car crash that also killed Princess Diana and poisoned his relationship with the royal family (they no longer shop at Harrods).

Now rumors are flying that Al Fayed's crown jewel may be up for sale. Harrods spokesman Peter Willasey denies the store is on the block, but that hasn't stopped speculation about who might be shopping. One person said to be interested: Dickson Poon, the Hong Kong entrepreneur who took Harrods' London neighbor, the chic Harvey Nichols chain, private last year. Poon's London spokesman wouldn't comment. Another possible suitor is Philip Green, the sharp-eyed British retail magnate who has been talking to Harrods about selling its branded goods. (Green didn't return phone calls.) Says Neill Denny, editor of Retail Week, a London trade magazine: "If the right offer was made, yes, they [Harrods] are up for sale."

Denny estimates Harrods is worth less than $1 billion--a third of what Al Fayed, who also owns the Paris Ritz, was offered for the store eight years ago. While people still line up to get into the famous sales, Harrods has lost appeal among everyday shoppers. In the fiscal year ending February 2002 (the latest figures available), sales fell 1.4%, to $811 million. Retail sales in Britain, meanwhile, rose 5% during the same period. "Harrods is seen to have become rather brash," says a director of one major retail chain. "People are interested in serious fashion and quality design, not flash." David Oliver, a London partner with retail consultants Kurt Salmon Associates, argues that Selfridges, which is entertaining a $960 million bid from Canadian billionaire Galen Weston, has stolen some of Harrods' thunder. "In the last five years, Selfridges has done a fantastic job of reinventing themselves," he says. "That has taken the shine away from Harrods."

Indeed, Selfridges has transformed itself from a dowdy middle-brow emporium into a "store of brands," with clean, minimalist lines that section the store between Gucci, Prada, Helmut Lang, and other cutting-edge labels. Young shoppers rave about its food halls, electronics section, and extensive cosmetic offerings. Harrods, by contrast, is poorly organized and, unlike Selfridges, closed on Sundays. It also depends far more heavily on tourist traffic, and with a falloff in air travel and weak economic conditions, there aren't as many high-spending foreigners jetting in to shop. Faced with the prospect of having to invest in an expensive makeover, Denny says, "Now is as good a time as any to get rid of Harrods." Anyway, Al Fayed would still have a troubled soccer team to keep him busy. --Janet Guyon