Wednesday, 12 December, 2018

Reading House of Fraser could be saved after £90m Sports Direct buyout

House of Fraser to appoint administrators after investment talks fail Sports Direct buys House of Fraser out of administration for £90 million
Cary Erickson | 11 August, 2018, 10:20

Sports Direct has ridden to the rescue of House of Fraser after owner Mike Ashley stepped in with a £90m deal which will take the ailing department store chain out of administration.

The move came after House of Fraser, which employs 17,000 people directly and through contractors, on Friday went to court to seek protection from creditors.

The Sports Direct owner seems to have had the time to craft a lame slogan for his new bauble ("the Harrods of the high street"), yet gives the employees and pensioners no information on what the deal means for them.

House of Fraser opened at Rushden Lakes almost a year ago on August 24. The deal does not include the Dublin store. We will do our best to keep as many stores open as possible.

In a massive blow to its 17500 staff, House of Fraser is to appoint administrators after negotiations with its investors and creditors failed to conclude in a "solvent solution", according to reports.

Newcastle United owner Mike Ashley has always been rumoured to have been interested in buying the department store giant - as well as Philip Day, chief executive of Edinburgh Woollen Mill. The advantages brought by the warehouses and logistics already managed by this group will be an important key in the recovery of the House of Fraser's fortunes.

It is understood that Mr Day's proposal was in excess of £100 million, would have avoided an administration and included House of Fraser's pension scheme.

Prior to its collapse, Mr Ashley had held an 11% stake in the department store chain.

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The deal will see the tycoon tighten his grip over the British high street, adding to his sports retailing and "premium fashion" empire.

The billionaire has held an 11% stake in the business since 2014 and also owns nearly 30% of Debenhams, its main rival.

A string of United Kingdom retailers have either gone out of business or announced plans to close shops this year, as they struggle with subdued consumer spending, rising labour costs and higher business property taxes as well as growing online competition, particularly from Amazon.

House of Fraser was plunged into crisis last week after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.

The Unite union said despite a media storm over the treatment of staff at Sports Direct's Shirebrook warehouse, wages remained at a minimum and employment conditions were "threadbare".

"All stores will be open for business as usual today".

"Individual circumstances need to be accounted for".