Sports

Will Sports Direct save Chichester’s House of Fraser?

Will Sports Direct save Chichester’s House of Fraser?

United Kingdom billionaire Mike Ashley swooped in to rescue the House of Fraser Ltd department store chain for £90 million (S$157.5 million), staving off collapse for an anchor of the country's troubled shopping districts. Even within a struggling industry, the likes of House of Fraser look like relics of the Edwardian era, about as relevant to the 21st century as typewriters and video players.

In an announcement on the Luxembourg Stock Exchange earlier this morning, where its bonds are listed, House of Fraser had said "discussions with interested investors and its main secured creditors have not concluded in a solvent solution".

The CVA could yet be implemented, but some reports have suggested that some HoF locations could be converted into Sports Direct stores.

House of Fraser at Rushden Lakes will be open as normal today (Friday) despite the company calling in the administrators.

Newcastle United owner Mike Ashley has always been rumoured to have been interested in buying the department store giant - as well as Philip Day, chief executive of Edinburgh Woollen Mill. As we are all well aware, retailers and landlords are facing the most challenging environment since the post global financial crisis of 2008, driven by changing consumer trends, higher inflation, lower consumer spend and changing shopping habits. The advantages brought by the warehouses and logistics already managed by this group will be an important key in the recovery of the House of Fraser's fortunes.

A spokesperson for House of Fraser said this was "only a temporary situation and will be resolved".

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

Buying other businesses and strategic stakes forms part of that plan - equity investments have been made in Debenhams, French Connection, Game Digital, Findel and Goals Soccer Centres.

House of Fraser had said in June it needed to shut 31 stores and make up to 6,000 people redundant to survive, but that rescue programme was thwarted after Chinese group C.banner pulled out of a plan to inject fresh equity.

Richard Lim, of Retail Economics, said: "The combination of rapidly rising costs against a backdrop of seismic shifts in the way we all shop is pushing traditional business models to the brink".

"All stores will be open for business as usual today". "The demise of House of Fraser in many ways has been the result of poor leadership, paralysis in innovation and crippling levels of debt", Mr Lim added.