House of Fraser chain goes into administration

Heather Diaz
August 11, 2018

Since then, it has been revealed that Mike Ashley's Sports Direct has struck a deal to rescue House of Fraser out of administration for £90 million, raising hopes for the future of thousands of staff.

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

News is breaking that bargain sports retail giant Sports Direct has purchased House of Fraser Limited from the administrators.

Mr Lim at Retail Economics said it's likely that Mr Ashley will rebrand some House of Fraser sites as Sports Direct.

Under Mr Ashley's stewardship, Sports Direct has accumulated stakes - often through complex financial instruments - in a number of British high street chains, including Debenhams and French Connection.

Administration is the process whereby a troubled company calls upon independent manager in a bid to restructure the business and remain operational.

Bidders for the ailing department store chain were told to submit final offers on Thursday morning, with creditors working late into the night to thrash out a deal.

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With all 59 stores and 17,000 jobs saved at House of Fraser, a period of transition will now begin for the 170-year-old retailer.

Alan Hudson, Hunter Kelly, Colin Dempster and Craig Lewis from EY's restructuring team were appointed this morning as joint administrators of the group which is one of the UK's premium fashion, home and beauty retailer with 59 department stores across the United Kingdom and Ireland.

Sports Direct wrote to HoF's management last month to set out the terms of a rescue deal, saying it was willing to structure a transaction on similar terms (subject to due diligence to confirm the level of investment/cash injection required) to one proposed by the Chinese owner of Hamleys.

In the same breath, he said: "My ambition is to transform House of Fraser into the Harrods of the high street".

Thousands of anxious shopworkers at House of Fraser stores and its concessions are now waiting to discover their fate.

"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". Nanjing Cenbest, part of China's Sanpower Group [SPGC.UL], had owned the balance of 89 percent, having paid 480 million pounds for the stake in 2014.

"House of Fraser confirms that 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 required by no later than 20 August 2018", the group said in a statement on the Luxembourg Stock Exchange.

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