Published: Sat, August 11, 2018
Sport | By Wilson Duncan

House of Fraser rescued by Sports Direct in £90 million deal

House of Fraser rescued by Sports Direct in £90 million deal

Sports Direct, the British sportswear retailer controlled by tycoon Mike Ashley, has snapped up House of Fraser from the department store group's administrators for 90 million pounds.

The group employs more than 5,900 staff while a further 10,100 people are employed in the various concessions within the House of Fraser stores.

Alan Hudson of EY, joint administrator, said: "We have worked very closely with management, its advisors and creditors in recent weeks and are pleased that we have been able to successfully conclude a sale of the business in short timescales which preserves as numerous jobs of House of Frasers employees as possible".

A statement released on behalf of House of Fraser before the deal was struck said: "House of Fraser announces that its discussions with interested investors and its main secured creditors have not concluded in a solvent solution".

"Court hearings are expected to take place at 7.30 am today, at which orders will be sought appointing individuals from Ernst & Young LLP as administrators of each of the operating companies with immediate effect".

"A takeover will see House of Fraser become part of a group that includes Sports Direct and 30% of Debenhams".

The retailer has one store in Dublin and one in Belfast, though neither were in the cohort of outlets marked for closure under the rescue plan.

"All stores will be open for business as usual today", it said in an announcement to the Luxembourg Stock Exchange earlier today.

Potentially nodding to Mike Ashley's rumoured interest, House of Fraser chief executive Alex Williamson had said: "We are hopeful that the current negotiations will shortly be concluded".

In administration, Ashley will be able to choose which parts of House of Fraser he wants and those parts he does not.

House of Fraser opened at Rushden Lakes almost a year ago on August 24.

Bosses had hoped to close 31 of its 59 stores under a company voluntary agreement, a controversial insolvency process which allows struggling businesses to close unprofitable sites and cut rents.

Events have moved quickly since the 169-year-old retailer told investors on Thursday it needed to raise new investment by 20 August.

The rescue plan was derailed when Chinese group C.banner, owner of Hamleys toy shop, pulled out of a deal to buy a 51 per cent stake in House of Fraser and inject £70 million of crucial new capital.

"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".

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