House of Fraser calls in administrators

10 August, 2018, 22:50 | Author: Suzanne Horton
  • House of Fraser store sign. House of Fraser has settled a legal challenge from landlords over plans to close 31 of its 59 stores next year. PRESS ASSOCIATION

Interest has come from Sports Direct founder Mike Ashley, who already holds an 11 per cent stake in House of Fraser, Edinburgh Woollen Mill owner Philip Day and turnaround fund Alteri Investors.

However, the chain announced earlier today that it was calling in the administrators in a further bid to try and save the company.

Reading's House of Fraser store could have been saved after the company was bought out by Sports Direct.

The department store announced plans to close more than half of its shops back in June, although the Rushden Lakes store was not one of those identified for closure.

Mr Ashley's deal was struck through a pre-pack administration process, where a company is put into administration before a new buyer cherry-picks the best assets.

Bosses had hoped to close 31 of its 59 stores under a company voluntary agreement, a controversial insolvency process which allows struggling businesses to close unprofitable sites and cut rents.


The announcement continued: "Significant progress has been made towards completing a sale of the group's business and assets".

Alan Hudson of EY, joint administrator, 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 numerous jobs of House of Frasers employees as possible".

In a massive blow to its 17500 staff, House of Fraser is to appoint administrators after negotiations with its investors and creditors failed to conclude in a "solvent solution", according to reports. Stores were delaying opening until 11am, however.

"All stores will be open for business as usual today", it said in an announcement to the Luxembourg Stock Exchange.

"An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength".

House of Fraser has been plunged into fresh crisis after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain. This nearly certainly will leave at least part of the pension fund in the hands of the Pension Protection Fund as well as the continued prospect of job losses but helps to keep the doors open at some House of Fraser locations including the iconic former Kendal's site on Deansgate, Manchester.

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