House of Frasier agrees £90 million lifeline following administration
Troubled department store House of Fraser has been saved by a last-minute investment from Sports Direct owner Mike Ashley.
Mr Ashley has agreed to pay £90 million for the store which entered into administration on Friday after creditors failed to reach an agreement.
“The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business,” said Sports Direct in a statement.
The new development will act as a vital lifeline for House of Fraser’s 17,500 staff and 59 nationwide outlets.
House of Fraser has been under considerable pressure over the last few months after negotiations with Chinese firm C Banner broke down. The Asian investor was due to invest some £150 million into the company, but pulled out in July.
The department store was left with a rent bill of around £40 million.
Mr Ashley’s interest in the House of Fraser brand is not altogether surprising, however, as the Newcastle FC owner already owns an 11 per cent stake in the business.
The news follows a torrid year for bricks and mortar retail businesses, which saw the successive failures of names such as Maplin, Poundworld and Toys R Us.
Glen Took, consumer insight director at Kantar, said in the Guardian that clothing and footwear retailers’ troubles reflected a change in culture towards enjoying experiences rather than buying products.
“People are trying to make the most of their time doing something with family or friends and then they go shopping on a Sunday evening on the internet. If you look at social media culture, if you are going to have an amazing time doing something you can put on Instagram, what is going to give? It could be you are going to wear the same shoes you wore last week,” he said.