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Leisurewear boss buys stores

Frasers sold to Mike Ashley’s Sports Direct in £90m deal

House of Fraser Glasgow

Frasers: not clear if closures will go ahead as planned (pic: Terry Murden)


 

Department store chain House of Fraser has been acquired by Mike Ashley’s Sports Direct in a deal worth £90 million.

In a statement, Sports Direct said: “The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business.”

The deal was struck through a pre-pack administration process, where a company is put into administration with a new buyer waiting to pick up the discounted assets.

Mr Ashley already held an 11% stake in the department store chain which earlier appointed EY as administrators.

EY confirmed that the business would continue trading, including all stores and offices, while they attempted to complete a sale.

All 59 shops opened as usual today, including 31 that were earmarked for closure as part of a restructuring agreement.

Mr Ashley, who also owns Newcastle United Football Club and is a former director at Rangers, will now begin the process of turning some House of Fraser stores into Sports Direct outlets. He will rebrand others under the Flannels fascia. It is not known what he may be planning for Jenners.

Previously he had said he wanted to turn the sporting goods fashion chain, which he founded in 1982, into “the Selfridges of sport”.

As well as 750 Sports Direct stores, Mr Ashley has investments in Debenhams and French Connection.

House of Fraser, which includes the Jenners stores in Edinburgh and Loch Lomond, had been seeking an injection of cash after a Chinese investor withdrew its plan to invest £70m in the business.

Its corner outlet in Edinburgh’s Princes Street was among those that were scheduled to close under the restructuring plan.

House of Fraser employs 17,500 – 6,000 directly and 11,500 concession staff. The closure programme will see 6,000 jobs axed.

China-based C Banner, owner of Hamley’s toy stores, pulled out of plans to take a stake in the 169-year-old chain, leaving it and its creditors to seek alternative sources of finance.

Union calls for talks

Shopworkers’ trade union Usdaw has welcomed a swift end to House of Fraser being in administration. Dave Gill, National Officer said: “House of Fraser staff have been largely frozen out of the discussions about the future business so far and they were horrified to see the company fall into administration this morning.

“So we welcome a buyer for the whole business being found so quickly, which offers the best opportunity to save jobs. To be successful the new owners must listen to the staff and engage them fully in turning this company around.

“It is crucial that staff are treated with dignity and fairness through the transfer process and that is best done by the new owner recognising Usdaw as the trade union for House of Fraser staff.

“We are seeking urgent talks with Sports Direct. In the meantime we are providing our members with the support, advice and representation they require at this very difficult time.”

Poundworld may return

The Poundworld brand could be resurrected on some high streets just weeks after the discount chain collapsed.

A deal has been agreed in principle for Irish retail family the Hendersons to buy the brand and the leases on some of the stores.

However, the proposed deal would be likely to include only about 10% of the 355 Poundworld shops.



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