Sports Direct buys House of Fraser

August 10, 2018
By

Mike Ashley’s Sports Direct has bought House of Fraser for £90 million in a deal that potentially offers stores in Guildford , Epsom and Camberley a lifeline.

The future of 17,000 jobs in the UK was at risk on the morning of Friday (August 10) as House of Fraser announced it had fallen into administration.

Discussions between investors and its main stockholders did not end with a “solvent solution” leaving the only choice to appoint administrators, the department store chain announced on Friday.

This changed at roughly 10am when it was announced Mike Ashley was poised to rescue parts of the business for £90 million.

Mirror Online reported that in a stock market announcement Sports Direct said it had acquired all of the UK stores of House of Fraser, the brand and all of the stock in the business.

Prior to its collapse, Mr Ashley had held an 11% stake in the department store chain.

Read More

What everyone’s reading

Staff are being informed that they will be transferred over from House of Fraser to Sports Direct.

In June it was announced that House of Fraser would be closing its Epsom and Camberley stores as part of 31 closures nationwide. The retailer said it was the “only way” to secure its future.

A support group for those losing their jobs at the Camberley store was set up and a petition to save it was started by residents in the wake of the store’s closure.

The store in Guildford was not included as part of the closures, but there was fresh doubt on its future at the start of August as House of Fraser struggled to secure a rescue deal.

There has not yet been an announcement on the store closures, although sources say Mr Ashley plans to turn some into Sports Direct outlets and rebrand others under the Flannels fascia.

Ashley beat off competition from retail rival Philip Day, the billionaire owner of Edinburgh Woollen Mill, to buy House of Fraser.

It is understood that Mr Day’s proposal was in excess of £100 million, would have avoided an administration and included House of Fraser’s pension scheme.

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

When facing administration some of the company’s assets were still optioned for rescue in which Sport Direct could cherry pick the best ones in a pre-pack administration process.

Stores in Camberley and Epsom were due to close
(Image: Rob Browne/ WalesOnline)

“All stores will be open for business as usual today,” House of Fraser said in an announcement to the Luxembourg Stock Exchange on Friday morning.

Discussing the previously failed deal, chief executive Alex Williams said on Friday: “We are hopeful that the current negotiations will shortly be concluded.

“An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength.

“In the two weeks since the Cenbest and C. Banner transaction ceased, the directors have brought forward a number of potential buyers and the group’s financial advisers have run a comprehensive MA process to identify and then develop other third party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace.”

House of Fraser had been plunged into fresh crisis after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.

C.banner was planning to buy a 51% stake in House of Fraser and plough £70 million into the ailing retailer, but scrapped the move last week.

Frank Slevin, chairman of House of Fraser, said: “This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan.

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.”

Article source: https://www.getsurrey.co.uk/news/surrey-news/sports-direct-buys-house-fraser-15012287


Famous Words of Inspiration...

Tags: