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


Sports Direct, owned by billionaire Mike Ashley, has agreed to buy struggling high street department store House of Fraser for £90m in cash, it was revealed this morning.

Some 17,000 staff have been informed that they will be transferred over from House of Fraser to Sports Direct.

"The directors of the group's operating companies, House of Fraser (Stores) Limited, House of Fraser Limited and James Beattie Limited (the "Operating Companies"), have therefore resolved to seek the appointment of administrators".

Mr Lim at Retail Economics said it's likely that Mr Ashley will rebrand some House of Fraser sites as Sports Direct.

He added: "Retailers that provide the right experience and service are really adapting the way that people shop, and as a result, are changing the requirement for the bricks and mortar store so it would be interesting to understand Sports Directs' take on this".

The store chain had earlier announced its fall into administration, but insisted that "significant process has been made" in finding an owner.

If there is a more hopeless business to be in than department stores, it is hard to think of it.

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The 169-year-old company joined a string of major British retailers who have fallen victim to fierce online competition, rising business rates and stretched household budgets amid Brexit uncertainty.

Now thousands of jobs remain under threat at House of Fraser, after the chain of department stores was forced to file for administration.

Liz McAreavey, chief executive of the Edinburgh Chamber of Commerce, said: "Hopefully this sale will not only protect this iconic high street brand, but will also safeguard thousands of jobs".

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. We will await further news over the coming weeks and months to see how the sale of House of Fraser to Mike Ashley will specifically impact upon the Royal Leamington Spa store.

The company had pushed through a rescue deal called a CVA, or company voluntary arrangement, that involved shutting 31 of its 59 stores in order to salvage the rest of the business.

"Despite the very recent termination of the transaction between Cenbest and C.Banner, I am confident House of Fraser is close to securing its future".

It is not clear what will happen now to those stores and their workforce following the takeover by Mr Ashley. Nanjing Cenbest, part of China's Sanpower Group [SPGC.UL], had owned the balance of 89 percent, having paid 480 million pounds for the stake in 2014.