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Sunday 05 July 2020

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Most House of Frasers to close after Christmas

Written by Peter Walker
07/10/19

Sports Direct is planning to shut down almost all House of Fraser stores once the Christmas trading period comes to an end.

This is according to reports in the Sunday Telegraph, which suggested that Mike Ashley’s company is either not paying rent, or preparing to end the leases, on most of the remaining department stores it owns in the UK.

A statement from Sports Direct noted that the Telegraph article refers to “fresh papers from administrators EY”, which is the progress report for the administration of HFL Realisations - formerly House of Fraser, which went into administration in 2018 - which refers to a number of leases being surrendered for nothing and a small number of property leases remaining to be dealt with.

It explained that these surrenders relate to the leases between the landlord and the old House of Fraser company and have nothing to do with Sports Direct Group, including the new House of Fraser group.

"Sports Direct has entered into new leases on the majority of House of Fraser stores," read the statement, noting that the EY report relates to an entirely different company.

"As a result of this erroneous misreading of the administrators report from EY, staff across the HoF group have today woken up to a false sense of job insecurity," the company responded. "Sports Direct is working rapidly on our ongoing investment programme with the House of Fraser brand and it is therefore totally incorrect to assume that there will be large numbers of store closures in the new year - we are taking legal advice with regards to this unbelievable level of misreporting.”

The group bought House of Fraser out of administration for £90 million last August, taking control of three offices, two warehouses and 59 stores. A handful of stores have closed since then, with widespread speculation about the closure of the rest.

In its full-year report published at the end of July, Sports Direct admitted that House of Fraser was in terminal decline, with Ashley expressing regrets over the deal.

House of Fraser recorded a full-year operating loss of £54.6 million, with revenues of £330.6 million. Weeks after those results, creditors extended House of Fraser’s administration for another year.

Ashley has previously indicated plans to close several stores, prioritising plans to launch an upmarket spin-off called Frasers. Last week, Sports Direct unveiled this new concept with a flagship store in Wolverhampton’s Mander Centre.

Currently, only the House of Fraser flagship in Glasgow operates under the Frasers name.

Previous reports have suggested that Sports Direct is looking at investing in between 15 to 31 House of Fraser stores over the next five years to relaunch the chain.



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