House of Fraser Snapped Up by Sports Direct After Falling into Administration
Written by: Keith Tully
Date: Friday 10th August, 2018
The department store chain House of Fraser has been acquired by Sports Direct after having fallen into administration.
Deals that might have rescued the business before it entered administration were being discussed with various interested parties in recent weeks but those efforts eventually proved to be in vain.
However, Sports Direct, the retail business owned by Mike Ashley, who also owns Newcastle United Football Club, has stepped in and acquired all House of Fraser stores, brands and stock.
Mr Ashely has owned an 11 per cent stake in House of Fraser since 2014 and also owns almost 30 per cent of Debenhams, another high street retailer which is very much a rival of the business now wholly owned by Sports Direct.
The deal which has seen Sports Direct acquire House of Fraser is understood to be worth £90 million but the future remains unclear for the thousands of people employed across the business.
There are a total of 59 House of Fraser stores around the UK and the business as a whole employs roughly 11,000 people.
Having first been founded 169 years ago, House of Fraser becomes one of the oldest and largest high street retail operations ever to fall into administration in the UK.
It follows the likes of Toys R Us, Maplins and Poundworld in collapsing into administration over the course of recent months.
Meanwhile, other well-known and well-established retailers including Carpetright, Mothercare and New Look have all been obliged to seek out rescue packages and to cut deals with their creditors in order to remain afloat.
The deal which has seen Sports Direct acquire House of Fraser was done in an effort to preserve as many jobs as possible, administrators from EY have explained.
“It was a challenging transaction to achieve in such a short period of time which will ensure continuity of the business and preserve the goodwill,” said Alan Hudson, one of the appointed administrators.
“We hope that this will give the business the stable financial platform that it requires to flourish in the current retail environment.”
Author
Keith Tully
Partner
Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.
