Sports Direct and House of Fraser in court showdown
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.