Mike Ashley has said that he will be aiming to keep around 80 per cent of the House of Fraser department stores, acquired earlier this month, open for business. This includes the Oxford Street store which the previous management had planned to close under the terms of its CVA. Some stores would by necessity be completely overhauled and may potentially see floors assigned to Ashley’s upmarket chain Flannels, whilst some may also house Sports Direct ‘store-in-stores’. His overall aim though is to turn the somewhat threadbare House of Fraser stores into what he has described as the ‘Harrods of the High Street’ with added value services and luxury brands, rather than the mid-market offerings more commonly associated with House of Fraser.
With a deal struck that leaves suppliers to the store under its former management, and landlords, owed significant sums, with many now looking to the former owner, the Chinese firm Sanpower for redress as well as to recently departed chair Frank Slevin who was also chair of Brookstone in the US, another Sanpower controlled business which has also recently hit the buffers. It is a moot point for many that Ashley acquired the assets and brand of House of Fraser and has no liability whatsoever for the debts run up by its former management/owners or for the business’ pension liabilities.
One closely connected contact said “It has been like the Emperor’s New Clothes in respect of the Chinese connection. Large scale investment was pledged for the UK and for the opening of House of Fraser stores in China but never materialised. House of Fraser has needed an overhaul for a decade but no one (on the board) seemed willing or able to bring about the radical change needed. Perhaps Ashley has what it takes to turn it around. It couldn’t get worse.”
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