House of Fraser’s flagship store saved in signal of ‘turnaround commitment’

● Oxford Street store wins reprieve as new owner looks to save 47 of its shops

Sports Direct, the new owner of the House of Fraser chain, yesterday said a deal agreed to save its flagship store on London’s Oxford Street from closure highlighted its commitment to turning the business around.

The key site had been due to close under a House of Fraser company voluntary arrangement (CVA) that was announced in June.

Sports Direct boss Mike Ashley has said he will save about 47 of House of Fraser’s 59 stores as he works on plans to transform the retailer into the “Harrods of the high street”.

The beleaguered department store group collapsed into administration earlier this month, before being snapped up by Sports Direct.

James Keany, head of national agency at CBRE, the real estate services and investment firm which is advising Sports Direct on property-related matters regarding House of Fraser, said: “This deal only happened because all parties realised it was better to keep the store open and fully operational.

“It was a real case of landlord and tenant genuinely working together and at great speed. Everyone was sensible about the terms of the transaction.”

This is the first deal to be agreed on a House of Fraser store since Sports Direct stepped in earlier this month.

Michael Murray, Sports Direct’s head of elevation, suggested the speed with which the deal was struck showed a commitment to turning around the House of Fraser business.

He said: “We said we would keep as many stores open as possible, and in less than a week we have saved the biggest store. Oxford Street was meant to close in January and now it’s safe, which is great news for all parties. Everyone must remember it was a bust business and we need landlords, councils and brands to pull together to save House of Fraser on the high street.”

House of Fraser had recently agreed a CVA with landlords to close half of stores, with 6,000 jobs in the firing line.

The Oxford Street store news came just a day after it was announced that XPO Logistics is axing more than 600 jobs at its House of Fraser warehouse after a dispute with the retailer’s new owner.

Ashley has said he will not pay creditors for debts prior to his takeover. This has left XPO Logistics owed more than £30 million, leading to the closure of the sites it was running in Wellingborough and Milton Keynes. All online orders have also been cancelled.

Mulberry, another House of Fraser supplier, has also warned its profits could take a £3m hit.