Sports Direct buys House of Fraser for £90 million
The news follows the 169-year old department store chain appointing administrators Ernst & Young this morning.
In a statement, Sports Direct said it has agreed to pay £90 million to acquire all of House of Fraser’s UK stores, the House of Fraser brand and all stock within the business.
For the year ended 28 January 2017 the House of Fraser group had gross assets of £946.3 million and made £14.7 million net profit. The company employs 17,000 people across the UK.
Earlier today, House of Fraser said discussions with interested investors and its main creditors had failed to bring about a “solvent solution” but that “significant progress” meant that the administrators were hopeful of closing a transaction shortly after their appointment.
Ashley has owned an 11% stake in House of Fraser since 2014. He also retains nearly a 30% stake in rival department store chain Debenhams.
Back in May Chinese retail group C.Banner was planning to buy a 51% stake in House of Fraser and introduce new capital on condition that the department store reduced the size of its store portfolio through a Company Voluntary Arrangement. House of Fraser then committed to closing 31 of its UK stores. But C.Banner withdrew its proposal after a drop in its share price meant its plans to raise funds to invest in House of Fraser became “impracticable and inadvisable”.
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