Ashley talks spark fears
House of Fraser concerns ramped up
SPORTS Direct are kicking off urgent talks with House of Fraser’s store owners, fuelling fears of closures.
Property experts CBRE have been hired after Sports Direct’s £90million deal to buy the collapsed department store chain.
“Contact will be made with all landlords over the following days,” CBRE said yesterday.
Sports Direct, controlled by billionaire Mike Ashley, got 59 store leases under the deal. But there are concerns they will press ahead with House of Fraser’s previous plans to shut down 31 of those.
Retail expert Nick Bubb predicted Ashley would end up selling a handful of House of Fraser stores – possibly to John Lewis or Selfridges – close the worst-performing ones and keep a number running.
Negotiations with store landlords could include cutting the rent bill.
Sports Direct’s share price tumbled 1.4 per cent yesterday amid investor nervousness about the deal.
Bubb said: “It is far from clear if he [Ashley] knows what he has taken on.”
Newcastle United owner Ashley said in a statement on Friday: “We will do our best to keep as many stores open as possible.”
He also vowed to transform House of Fraser into the “Harrods of the High Street”.
But experts say the entrepreneur has had mixed fortunes through his investments in other firms.
Sports Direct last month booked an £85million charge on their big stake in struggling department store chain Debenhams.
Meanwhile, a billionaire who lost a battle to buy House of Fraser has had a dig at Ashley.
Philip Day, who owns Edinburgh Woollen Mill, called on Ashley to do the “honourable thing” and ensure all House of Fraser’s suppliers are paid in full.
It is believed suppliers and concessions are owed about £70m.
Dubai-based Day, who is famously publicity shy, is understood to have had a £100m offer for House of Fraser rejected by their banks.