House of Fraser has extended its administration for a further 12 months, just weeks after owner Sports Direct Group branded problems at the department store as “nothing short of terminal in nature”.
The ailing department store’s creditors have approved another year of administration, ending 10 August 2020. Documents detailing House of Fraser’s progress, and a continued turnaround plan will be released later this week by its administrators EY.
Sports Direct acquired House of Fraser for £90m in August 2018 through a pre-pack administration. Sports Direct CEO Mike Ashley promised to transform the retailer into the “Harrods of the high street”.
However, a year later Ashley’s retail group delayed the reporting of its annual results citing “complexities” of integrating House of Fraser and “uncertainty as to the future trading performance” of the business.
In the report Ashley said: “Our acquisition of House of Fraser has led to significant uncertainty as to the future profitability of the group as a whole, albeit not impacting the going concern assessment of the group. There are significant operational and investment issues we are trying to rectify based on the appalling mismanagement of House of Fraser, prior to its acquisition by the Sports Direct Group, that led to its downfall.”
Further House of Fraser store closures are expected later this year. Several locations are unprofitable despite paying no rent.