Sports Di­rect and House of Fraser in court show­down

The Sunday Telegraph - Money & Business - - Business - By Tim Wal­lace

TWO of Bri­tain’s big­gest re­tail­ers are set to do bat­tle in court as Sports Di­rect says it is be­ing un­fairly de­nied ac­cess to cru­cial doc­u­ments on House of Fraser’s cor­po­rate plan.

Sports Di­rect holds 11.1pc of House of Fraser’s shares but said it has been “frozen out” by the de­part­ment store’s di­rec­tors. As a re­sult it lodged a pe­ti­tion at the High Court on Fri­day seek­ing an in­junc­tion re­quir­ing House of Fraser to pro­vide a copy of its cor­po­rate plan, and any other in­for­ma­tion that par­towner West Coast Cap­i­tal is seek­ing.

“We have been frozen out by House of Fraser,” said Sports Di­rect’s head of strate­gic in­vest­ments Liam Rowley.

“Their deal­ings in China are opaque, and it is bla­tant that we have been un­fairly prej­u­diced. We have no op­tion other than lit­i­ga­tion to pro­tect the in­ter­ests of Sports Di­rect and its share­hold­ers.”

The le­gal fil­ings men­tion di­rec­tors by name, in­clud­ing House of Fraser’s chair­man Frank Slevin.

House of Fraser de­clined to com­ment on the le­gal case.

Last week Chi­nese group C.ban­ner, which owns Ham­leys, took a 51pc stake in the in­ter­na­tional en­tity House of Fraser Group, the par­ent of the UK firm in which Sports Di­rect is an in­vestor. C.ban­ner bought shares from Cenbest – a part of the San­power Group and pre­vi­ous ma­jor­ity owner of House of Fraser – and in­vest­ing new cap­i­tal.

Cenbest re­mains a mi­nor­ity in­vestor in the in­ter­na­tional group.

House of Fraser is also restruc­tur­ing through a Com­pany Vol­un­tary Ar­range­ment (CVA) which it will launch next month. This is ex­pected to see it

‘Their deal­ings in China are opaque, and it is bla­tant that we are be­ing un­fairly prej­u­diced’

cut jobs and stores. The firm said: “There is a need to cre­ate a leaner busi­ness.”

Mr Slevin said at the time that the restruc­tur­ing and cap­i­tal in­jec­tion com­bi­na­tion “rep­re­sents a step to se­cur­ing House of Fraser’s long-term fu­ture”.

The de­part­ment store is also ex­pected to have to pump more funds into its de­fined ben­e­fit pen­sion scheme to ad­dress its li­a­bil­i­ties.

It comes amid a ma­jor shakeup in the re­tail sec­tor as on­line sales force more tra­di­tional shops to shut their doors or find new ways to at­tract cus­tomers.

High-pro­file ca­su­al­ties this year in­clude Maplin and Toys R Us.

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