Mike Ashley’s Sports Direct has agreed to buy the House of Fraser department store chain for £90m
The deal was announced just hours after the 169-year-old chain went into administration when talks with its creditors failed to reach an agreement.
Mr Ashley said his plan was to turn the 59-store chain in to the “Harrods of the High Street”.
It employs 16,000, 5,900 directly and 10,100 in concessions. Administrators said jobs could be “preserved”.
While some stores did not open on time on Friday, initial problems with the website were resolved. There were reports, though, that gift cards were not being accepted.
Sports Direct said in a statement: “The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business.”
Sports Direct already held an 11% stake in the department store chain, which had been intending to close 31 shops under a now-abandoned restructuring plan.
House of Fraser’s administrators, from accountants EY, said the department store chain had been in “a race against time to secure sufficient funding to secure its future” ever since the Chinese firm C.banner pulled out of a rescue deal earlier this month.
What does this mean for jobs?
Before Friday’s deal was announced, 6,000 roles were to have been lost.
Alan Hudson, one of the four administrators from accountants EY, said the Sports Direct deal “preserves as many of the jobs of House of Fraser’s employees as possible”.
“We hope that this [deal] will give the business the stable financial platform that it requires to flourish in the current retail environment”.
But union officials at Unite said staff were entering “a period of great uncertainty and worry”.
Unite regional officer Scott Lennon said: “Sports Direct is a leopard that has not changed its spots and we hope that its poor record on pay and employment practices are not transferred to the House of Fraser.”