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Sports Direct acquires House of Fraser

Sports Direct has bought House of Fraser out of administration for £90m.

The group has bought all the stores and all of the stock in the business.

For the year to 28 January 2017 (the last date for which statutory accounts are available), the House of Fraser group had gross assets of £946.3m and made £14.7m net profit.

The embattled department store chain appointed EY as administrators this morning (10 August) and said the business would continue trading while it attempted to complete a sale.

Sports Direct owner Mike Ashley, Edinburgh Woollen Mill owner Philip Day and turnaround specialist Alteri Investors were the frontrunners to buy HoF.

Drapers understands that Day was leading a consortium of suppliers in a rival bid to buy HoF out of administration for £100m. However, a source close to the situation told Drapers Day was “frozen out by administrators”.

Alan Hudson, joint administrator  from EY’s Restructuring team, said: “We have worked very closely with management, its advisors and creditors in recent weeks and are pleased that we have been able to successfully conclude a sale of the business in short timescales which preserves as many of the jobs of House of Frasers employees as possible. 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. We hope that this will give the business the stable financial platform that it requires to flourish in the current retail environment.”

 

Readers' comments (7)

  • You can say what you like about Mike Ashley but he always gets what he wants in the end and usually gets a good deal, will need to see how this plays out for suppliers and staff

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  • darren hoggett

    I suspect Ashley has just been playing awaiting game as this has been on the cards for several years. He can't be any worse than the shambles that has gone in before.

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  • Eric Musgrave

    Anyone who recalls what Sports Direct did to Lillywhites at Piccadilly Circus will not have high hopes for House of Fraser. Let's hope there is some upside in all this for the employees. Any mention in the announcement of what is happening to the pension fund? Will Mr & Mrs Taxpayer be called upon to sort it out?

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  • Hi Eric, I understand exactly your sentiments and fond memories of Lilllywhites, however we must remember that it was losing money prior to Mike Ashley’s purchase. He restored it to profitability pretty quick and whilst it’s a shadow of the ‘old’ store it’s making money, providing employment, paying suppliers and contribution to the wider economy.

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  • HOF were a shambles. Nobody can moan about what Ashley does and he has the right to with it whatever he likes, as the previous set-ups have been a disaster who have received far too much positive press for doing nothing and being complete failures, professionally speaking.

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  • Mike Ashley is an opportunistic thug, operates without ethics and will screw HOF. The pensions of HOF employees have not been protected as Mr Ashley only cares about how much money he can make out of any business deal and nothing else. He escaped recent government scrutiny relatively unscathed, giving him carte blanche to operate exactly how he wants in future, this does not bode well for the future of British retail. IMO this is a travesty.

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  • Ashley is an opportunist, but he is a businessman. Is he doing anything illegal here? No.

    He taken on an abysmal business and it is far from clear that he will turn it around, so it could be his first big mistake.

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