Published: Sat, August 11, 2018
Sport | By

Sports Direct acquires House of Fraser for £90m

Sports Direct acquires House of Fraser for £90m

The future of House of Fraser's Dublin outlet is unclear after it was excluded from Sports Direct's buyout of the department store.

In an announcement on the Luxembourg Stock Exchange earlier this morning, where its bonds are listed, House of Fraser had said "discussions with interested investors and its main secured creditors have not concluded in a solvent solution".

House of Fraser at Rushden Lakes will be open as normal today (Friday) despite the company calling in the administrators.

Sports Direct boss Mike Ashley has reportedly agreed to pay £90million for the chain - which includes an Aylesbury Friars Square Shopping Centre store which was already scheduled for closure.

However, doubt remains over the long-term future of jobs and whether Mr Ashley will shut underperforming stores as part of a restructuring programme.

"For the year ended 28 January 2017 (the last date to which statutory accounts are available for the parent company of the operating companies and prior to the appointment of the administrators), the House of Fraser group had gross assets of £946.3m and made £14.7m net profit".

In the same breath, he said: "My ambition is to transform House of Fraser into the Harrods of the high street". A self-made billionaire who also owns the Newcastle United football club, Mr Ashley is a colourful figure on the UK retail scene, describing himself in courtroom testimony past year as a "power drinker" with a penchant for late-night pub antics.

"This will benefit both House of Fraser and Flannels in the luxury sector".

This precipitated a three-way tussle between retail billionaires Ashley and Philip Day as well as a proposal by Alteri Investors, with Ashley ultimately emerging on top.

House of Fraser's pension scheme was expected to enter assessment by the Pension Protection Fund lifeboat, a spokeswoman for the PPF said.

However, accountancy giant EY, which was overseeing the process, opted for Mr Ashley's offer.

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

Like other retailers, House of Fraser has been stung by soaring costs and falling consumer spending power.

House of Fraser has been plunged into fresh crisis 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". "Turning around the business will not come easy".

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