It has been announced today that Sports Direct’s Mike Ashley has brought House of Fraser from administrator, Alan Hudson of EY, on a £90 million rescue deal.
All UK Stores, the House of Fraser brand and the businesses stock was acquired. The deal was finalised just hours after the chain of department stores fell into administration, as they failed to reach an agreement with creditors in regards to a Creditors Voluntary Arrangement.
16000 staff are employed at the 169-year-old chain. 6000 roles have already been lost, however, with the new deal, administrators have said how many jobs will be saved. Despite this, Unite Union voice their concern and uncertainty of the deal, with fear of them having to adopt the same poor pay and employment practises which sports direct employees are believed to have.
Mr Ashley states his ambition, to ‘’transform House of Fraser into the Harrods of the High Street’’. The deal hopes to give the business the financial assistance it needs to flourish in the retail industries current environment. He hopes to keep as many stores open as possible. Mr Ashley sparks ideas of making the store more ‘upmarket’. However, there are talks of the move becoming more downmarket, due to the nature of sports direct, being in the discount market.
What will the outcome be? Will House of Fraser become the Harrods of the High Street?