House of Failure
Customers’ fury after crisis-hit House of Fraser cancels ALL web orders and shuts delivery service
FURIOUS shoppers slammed House of Fraser last night after the store cancelled all online orders and completely shut down its delivery service.
Around 50,000 deliveries are thought to be affected by the fiasco, which erupted when the chain’s warehouse operator stopped processing purchases.
It is owed £30million by the troubled retailer, which went into administration last week and was quickly bought by Sports Direct boss Mike Ashley.
Experts criticised the company’s handling of the crisis, warning that ‘trust and loyalty are hard-won in retail’.
It also emerged yesterday that House of Fraser owes hundreds of suppliers £484million – money that Mr Ashley is refusing to pay.
Among those facing losses include luxury brands Giorgio Armani, Mulberry and Ralph Lauren, according to documents published by administrators Ernst & Young. Small businesses, restaurants and logistics companies have also been hit.
Women’s fashion chain Jigsaw – which is owed around £500,000 – has pulled its entire range from stores. Karen Millen, owed around £950,000, is understood to have done the same. Former Oasis frontman Liam Gallagher is also owed money. His clothing label Pretty Green is currently £500,000 out of pocket.
House of Fraser took its website offline earlier this week, and has now offered a refund to thousands of customers. ‘Due to delays with delivering online orders, we have taken the decision to cancel and refund all orders that have not already been sent to customers,’ it said on Twitter.
‘All customers affected will receive an email in the next couple of days. Please accept our apologies.’
However the message failed to placate customers. One responded: ‘Absolutely disgraceful. Ordered a £90 purse last Thursday. Yes a week ago for my daughters’ birthday.
‘Not one email concerning delivery or info and now order cancelled and you say email in a few days! Get my money back ASAP.’
Others directly criticised Mr Ashley’s handling of the debacle. One Twitter user said: ‘Great start Mike [Ashley]. Wouldn’t have expected anything less. My order issues pale in comparison to the stress being caused to your staff. One week in...’
The row is an embarrassment for Mr Ashley, who last week pledged to turn House of Fraser into the ‘Harrods of the high street’ after buying the chain for £90million.
The deal was completed using a controversial pre-pack administration – meaning he will take on the business free of debts.
It also means he does not have to pay suppliers any money owed before House of Fraser went bust. The tracksuit tycoon, who also owns Newcasthat tle United FC and is worth £2.8billion, has also refused to take on the pension liabilities of thousands of staff.
One employee of XPO Logistics – which operates the warehouses – said: ‘There are loads of us just sitting around in the canteen. We have been playing cards and we have just ordered Chinese.’
The House of Fraser website was still closed last night.
Richard Lim, chief executive of analysts Retail Economics, said: ‘You would have thought delivering a great service to customers would have been a priority for the company. Delivering goods into the hands of customers now has to be the top priority.’
MPs called on Mr Ashley to support pensioners who may see their benefits cut because of limited guarantees available through the Pension Protection Fund – the pensions lifeboat for collapsed firms.
Frank Field, chairman of the Commons work and pensions committee, said: ‘Mike Ashley should take responsibility for the pension scheme. It is in surplus... It couldn’t be more favourable conditions for him to take it with him.’
A source close to Sports Direct said XPO Logistics had been ‘completely unreasonable’ in its handling of the situation.
‘They’re very much trying to hold Mike Ashley and his team to ransom,’ the source said.
Sports Direct declined to comment. XPO Logistics was not available for comment.
‘Absolutely disgraceful’