Mike Ashley has warned hundreds of jobs at House of Fraser will be axed unless ‘greedy’ landlords back down in a row over rents.
The tracksuit tycoon, who bought the High Street chain out of administration for £90million, stepped up his attacks as talks over the firm’s department stores reached a critical stage.
He has pledged to save as many of House of Fraser’s 59 stores as possible, with deals reached on around seven so far including its flagship building on Oxford Street in central London.
Mike Ashley, who bought House of Fraser out of administration for £90million, stepped up his attacks at landlords as talks over the firm’s department stores reached a critical stage
But tense discussions about the rest have hit difficulties with landlords reluctant to accept cuts to rents.
In a warning shot to hold-outs, Ashley said a spate of store closures could be announced this week unless deals are agreed, putting hundreds of jobs at risk.
A House of Fraser spokesman said: ‘Some landlords are being very collaborative in order to give us a chance at turning the business around, giving House of Fraser a lifeline and saving hundreds of jobs.
‘However, some greedy landlords would rather see the stores close than help save the jobs of hundreds of people.
‘We will continue to try and convince these landlords but ultimately time is running out.’
Sports Direct founder Ashley has said he would aim to save around 80 per cent – or 47 – of House of Fraser’s stores.
Row over online refunds
Furious House of Fraser customers are still waiting for refunds nearly two weeks after the chain cancelled all of its online orders.
The retailer has also failed to respond to emails from shoppers asking when they will get their cash back, it was claimed yesterday.
Customers aired their frustration on Twitter, with some saying they had turned to their banks for help.
Tweeting at the chain, Natalie Costello wrote: ‘I’ve not received an email or a refund OR a reply to 1 of my 4 emails. I placed an order with you 3wks ago and you’ve taken my money.’
House of Fraser did not comment on the tweets last night.
To achieve this the 53-year-old’s representatives are arguing for steep cuts in rents.
Ashley is offering some landlords no rent payments at all, instead offering to simply cover their business rates.
Meanwhile, others are being offered rents equivalent to 5 per cent of their turnover. So far talks have led to stores including Oxford Street, Telford in Shropshire and Plymouth being saved from closure.
Ashley has pledged to save as many of House of Fraser’s 59 stores as possible, with deals reached on around seven so far including its flagship building on Oxford Street in London
Ashley, who bought House of Fraser through Sports Direct and also owns Newcastle United, said: ‘It is a massive step forward and further enhances our strategy of elevation across the group. My ambition is to transform House of Fraser into the Harrods of the High Street.
‘We will do our best to keep as many stores open as possible.’
Mark Williams, president of retail property group Revo, claimed landlords may be resisting Ashley’s demands because they thought better agreements were possible with rivals.
He added: ‘Mike Ashley is an astute businessman but the debate over rent is a side show.
‘Rent is a tiny part of the cost of running a store and will not be decisive in whether he keeps space or not.
‘I suspect he’s encountering resistance from owners of particular stores who see an opportunity to transform that space into alternative uses, or where there is strong demand from competing occupiers.’
House of Fraser tried to lower rent before it collapsed through company voluntary arrangements (CVAs), but faced resistance from landlords.
A spokesman for Intu, one of the landlords that backed the agreement, said: ‘Each case must be looked at on its own merits.’