Ashley closes four Frasers
MIKE ASHLEY’S Sports Direct is to close four House of Fraser stores after failing to agree new rent deals with their landlord.
The retail tycoon said he wanted to keep open about 80 per cent or 47 out of 59 HoF stores after buying them for £90million from administrators in August.
But despite striking some deals including maintaining the flagship store in London’s Oxford Street and buying the freehold of the Glasgow store to create the “Harrods of the North”, Ashley has warned time is running out for others because of the “greed” of landlords.
The four, at Lakeside in Essex, MetroCentre in Gateshead, Nottingham and Norwich will close in the new year after Sports Direct failed to agree terms with Intu Properties.
Ashley has reportedly been operating House of Fraser stores on licences enabling him to hand back the keys with two months’ notice, offering landlords shortterm deals tying rents to store performance or offering to pay business rates but no rent.
He said he had adopted a “flexible” approach with Intu but could not agree “reasonable terms”.
It is now in consultation with staff at the affected stores. He added: “We had multiple meetings with Intu but we were no further forward after 14 weeks.
“Unfortunately, these stores now face closing. I urge institutional landlords to be more proactive to help save the House of Fraser stores in their schemes.”
Intu, which could be taken private by a consortium in a £3billion deal, said the House of Fraser stores represent about 1 per cent of its secured rent and 526,000 sq ft of retail space.
It said: “While we cannot discuss the detail, we have been unable to reach agreement.
“We have a strong track record of re-purposing space. Ideas on the table include not only other large-scale retailers but also non-traditional shopping uses.”
The British Property Federation said “short-term fixes” such as going rent-free, can make sense for owners if the tenant covers costs.
But it added: “The challenge is this can be seen as creating unfair competition between retailers. The health of our high streets and property investment sector, which includes pensioners’ savings, rely on the certainty and stability of occupiers paying their rent.”