House of Fraser closes website in storm over missing orders
HOUSE of Fraser faced a new crisis last night after shutting its website amid customer complaints about missing orders.
Days after the troubled chain was bought out by Mike Ashley, the controversial billionaire boss of Sports Direct, its distribution centres effectively shut up shop.
The two warehouses, which process orders, are run by a third party company called XPO Logistics which is involved in a dispute with Sports Direct over payments.
It is understood that Mr Ashley is refusing to pay suppliers to House of Fraser, including XPO, for any work carried out before the takeover on Friday, which will leave a huge black hole in their accounts. Sports Direct has no legal obligation to pay as the business had gone into administration. In theory this allowed Mr Ashley to take control for a cut-price figure of £90million and escape any outstanding debts.
Normally in these circumstances the new owner would cover some previous debts to keep key suppliers happy and ensure trade continues smoothly. In this case, it appears relations have broken down.
The impasse, which has led to the suspension of the website, will create new cracks in the already fractured relationship with customers.
The two warehouses at the centre of the dispute are in Wellingborough, Northamptonshire, and Milton Keynes, Buckinghamshire. It is reported that XPO staff at Milton Keynes have prevented attempts by lorries from Sports Direct to pick up stock. Alan Costello, a regional organiser for the GMB union that represents workers at the warehouse, said staff had been told to down tools on Friday and were still ‘sitting in the canteen playing cards’.
The workers are being paid their basic wage, but some will miss out on productivity bonuses.
A source at Sports Direct said it was dealing with suppliers on a case-by-case basis.
‘XPO is unwilling or unable to get involved with us and that’s hampering our progress and impacting customers’ deliver- ies... and potentially putting at risk the rescue operation,’ said the source.
Dozens of customers have taken to social media to complain that their purchases have not arrived. House of Fraser’s official Twitter account told one irate customer: ‘Regrettably, due to the recent change in ownership, some orders have been delayed.
‘We don’t currently have a timescale for delivery. However, your order will be delivered as soon as possible.’
The chain has already faced criticism for refusing to accept its own gift vouchers following Mr Ashley’s takeover last week.
Signs posted in windows at the department stores had read: ‘Please be advised that we will not be able to process any gift card transactions. Please accept our apologies for any inconvenience this may cause.’
House of Fraser has now said customers will have to post gift cards and vouchers to its head office, and replacements will be issued. However, customers fear they will not be honoured or say posting high-value gift cards – which can each hold up to £250 – means using expensive recorded delivery to ensure they reach their destination.
Mr Ashley was also criticised after it was revealed his lastminute deal allowed him to dump any responsibility for the pensions of 10,000 staff.
But the move, which will see them placed in the Pension Protection Fund lifeboat scheme and lose up to 10 per cent of their retirement income, is set to be scrutinised by the pensions watchdog.
‘Some orders delayed’