House of Fraser set to fall into administration


House of Fraser set to fall into administration

Mike Ashley has been accused of abusing the system after he bought bust department store House of Fraser in a controversial £90million deal that leaves 10,000 pension fund members in the lurch.

Ashley's Sports Direct empire is taking on House of Fraser's 59 United Kingdom stores, its stock and its brand name.

Accountancy firm, EY who were appointed as administrator for the troubled fashion retailer have revealed that the 169 year store has been saved from closure with Mike Ashley stepping in and agreeing to buy this iconic chain.

Department stores have been having a hard time recently, with other big names such as Debenhams and Next also struggling, both reporting a large fall in profits earlier this year.

"All stores will be open for business as usual today". Although very few of House of Fraser's own brands remain, those such as Issa and Biba could be incorporated into this new format.

At the moment, the House of Fraser website is now down.

First thing this morning - things looked bleak for House of Fraser.

The deal expands Mr Ashley's retail empire, which also includes a stake in Debenhams.

House of Fraser said earlier this year that it planned to close 31 of its 59 stores, with the loss of more than 6000 jobs.

"In addition, it will be interesting to see how Sport's Direct's multichannel experience could help to turn around House of Fraser's department stores' ill-fate".

Mr Ashley is said to be weighing a bold plan that would result in the two department store chains ultimately being merged.

At that time chief executive Alex Williamson said: "We are hopeful that the current negotiations will shortly be concluded".

It gave no details of its plans for the business, ...

Mr Ashley is understood to have beaten off competition from retail rival Philip Day, the billionaire owner of Edinburgh Woollen Mill.

What made it worse was the fact that a lot of stuff sold within the stores was not House of Fraser's; it was sold by more than 600 third-party concession workers. The combination of both businesses will yield some vital cost-saving synergies while it's likely that some of the struggling House of Fraser sites will be rebranded to Sports Direct.

It said: "Discussions continue with interested investors and its main secured creditors, which are focused on concluding as quickly as possible to enable receipt of an investment by no later than 20 August".