Sports Direct boss Mike Ashley ‘is close to buying House of Fraser’


Furious House of Fraser customers have accused the chain of theft today after being told they could not use their gift vouchers following Mike Ashley’s buyout.

The Sports Direct billionaire today paid £90million for the department store – just 82 minutes after it was plunged into administration.

He has already pledged to make the chain, which employs 17,000 people, the ‘Harrods of the high street’ but admitted he is unlikely to keep all 59 stores open.

The House of Fraser website was taken offline as the takeover was announced and gift cards were refused in stores all over the UK. 

Signs were put up at tills apologising to customers for the ‘inconvenience’ of not accepting vouchers, to which one tweeted: ‘It’s not a matter of inconvenience, it’s straightforward theft’.

Linda Curran also wrote: ‘Furious – just been to House of Fraser in Glasgow and they refused to take my gift voucher as payment. Not accepting vouchers today’.

A spokesman for the chain has apologised and called the voucher problem ‘temporary’ and insisted staff have now been given the ‘green light’ to accept them. 

House of Fraser has gone into administration today putting 17,000 jobs at risk and 31 stores face closure 

House of Fraser has gone into administration today putting 17,000 jobs at risk and 31 stores face closure 

House of Fraser has gone into administration today putting 17,000 jobs at risk and 31 stores face closure 

Billionaire Cumbrian entrepreneur Philip Day

Billionaire Cumbrian entrepreneur Philip Day

Mike Ashley was waiting in the wings and beat a challenge from Edinburgh Wool Mill billionaire Philip Day to buy up the department store

This sign was put up by staff saying they would not take vouchers, leading to accusations of theft

This sign was put up by staff saying they would not take vouchers, leading to accusations of theft

This sign was put up by staff saying they would not take vouchers, leading to accusations of theft

The beleaguered department store chain went bust and bosses said they would be closing 31 stores, including its flagship Oxford Street branch. 

Timeline: House of Fraser’s financial crisis

2014: Sanpower group, owned by Chinese industrialist Yuan Yafei, buys House of Fraser. The new owner announces big plans to grow the business and expand into China by investing £75million in the business.

2015: House of Fraser posts its fifth straight year of statutory losses as the group suffers hefty charges related to its £300million refinancing, which it had used to fund store refurbishment and improve its buy-and-collect service.

2016: Despite Sanpower’s big expansion plans, by December of this year only one outlet has opened, in Chinese city of Nanjing.

September 2017: House of Fraser gets its first cash injection from its Chinese owner, who finally pumps in £25million.

May 2017: Chief executive Alex Williamson is brought in. He launches a turnaround effort to overhaul House of Fraser’s product range and stores while trimming costs. He says he wants to cut property costs by 30 per cent within five to ten years.

January 2018: The struggling department store says it will close failing stores or reduce the size of others after recording disappointing Christmas sales.

March 2018: Sanpower announces plans to offload 51 per cent of its 89 per cent stake to a mystery Chinese leisure firm called Wuji Wenhua. Meanwhile another suitor appears – Chinese company Fullshare, controlled by billionaire Ji Changqun. However, the company issues a profit warning a fortnight before the deal is expected to be finalised.

April 2018: Accounting giant KPMG is called in to look into possible restructuring plans.

May 2018: The firm draws up proposals for a company voluntary arrangement – an insolvency process that could see it close up to 30 of its 59 stores and negotiate dramatic rent cuts on others. That is the condition to access £70million funding pledged by a second Chinese firm, C.banner, which owns the Hamleys toy shop in London. The Chinese owner of Hamleys, C.banner, has made access to the funds conditional on a restructuring deal being done.

June 7,  2018: The department store goes ahead with the CVA, which will result in the closure of 31 of its 59 stores across the UK and Ireland.

August 9, 2018: The chain announces it has just days to find new funding after C.banner pulls out. 

August 10, 2018: It collapses into administration – but is bought by Mike Ashley less than 90 minutes later 

Today Mr Ashley, who already owned 11 per cent, bought its shops, all the stock and website and says he will keep as many stores open as possible.

In a short statement to the London Stock Exchange, Sports Direct gave no details of its plans for the business, the future of its staff – over 5,900 direct employees and 10,100 who work for concession partners – or who would be responsible for pension liabilities.

It is not clear what will happen to the stores but it now appears several become Mr Ashley’s upmarket Flannels designer outlet shops. 

He said: ‘It is vital that we restore the right level of ongoing relationships with the luxury brands. Our deal was conservative, consistent and simple. My ambition is to transform House of Fraser into the Harrods of the High Street.’

The 17,000 workers facing uncertain futures will be transferred over from House of Fraser to Sports Direct, a business where some staff compared pay and conditions to a Victorian workhouse or a Siberian gulag.

The Sports Direct founder, who has previously said he dreamed of owning a British department store, faced a rival bid from Philip Day, the billionaire owner of Edinburgh Woollen Mill but this was rejected.   

Administrators EY stepped in today at 8.34am and Mr Ashley’s deal to buy the department store was announced at 9.56am. 

When House of Fraser toppled into administration today it ended 169 years of trouble-free trading for the retailer.

Labour shadow business secretary Rebecca Long-Bailey said House of Fraser staff would be concerned about the implications of the sale to Sports Direct.

‘Some of the biggest retailers on Britain’s high streets are being replaced by gaping holes,’ she said.

‘It is unforgivable that the Conservatives have stood by and done nothing while tens of thousands of jobs have been put at risk.

‘Their inaction has prepared the ground for the likes of Mike Ashley, notorious for his company’s poor treatment of workers, to hoover up businesses. Staff will undoubtedly be concerned about what the sale means for their wages and conditions.

‘How many more of our most recognisable high street brands have to go under before the Prime Minister steps up and addresses the broken business rates system which is turning our high streets into ghost towns?’ 

In a stock market announcement, Sports Direct said it has acquired all of the UK stores of House of Fraser, the brand and all of the stock in the business. 

The deal was struck through a pre-pack administration process, where a company is put into administration before a new buyer cherry picks the best assets.

The tycoon beat off competition from retail rival Philip Day, the billionaire owner of Edinburgh Woollen Mill.

It is understood that Mr Day’s proposal was in excess of £100 million, would have avoided an administration and included House of Fraser’s pension scheme.

However, accountancy giant EY, which was overseeing the process, opted for Mr Ashley’s offer.

The £90m deal gives Mr Ashley the stores, all its stock and the brand - and some staff could now join Sports Direct

The £90m deal gives Mr Ashley the stores, all its stock and the brand - and some staff could now join Sports Direct

The £90m deal gives Mr Ashley the stores, all its stock and the brand – and some staff could now join Sports Direct

The House of Fraser websites was down today but the company says it is honouring existing orders

The House of Fraser websites was down today but the company says it is honouring existing orders

The House of Fraser websites was down today but the company says it is honouring existing orders

Sources said that Mr Ashley will now begin the process of turning some House of Fraser stores into Sports Direct outlets and rebrand others under the Flannels fascia.

House of Fraser briefly goes bust: What are my rights?

I have vouchers – what do I do?

House of Fraser customer services insist it is business as usual today and are honouring gift vouchers and money off vouchers from its ‘Recognition’ loyalty card scheme.

Some customers said they were barred but bosses insist this was temporary and normal service has resumed 

I ordered something online – will I get it?

House of Fraser says all orders before administration will be sent or available for collection. The site was closed today so no new orders are possible. 

Can I still get refunds?

Yes – you can still return the item within 14 days for a full refund.

For those who wait up to 28 days you can get an exchange or refund via gift card. 

Prior to its collapse, Mr Ashley had held an 11% stake in the department store chain.

The deal will see the Newcastle United owner tighten his grip over the British high street, adding to his sports retailing and ‘premium fashion’ empire.

The billionaire has also built up stakes in rivals such as Debenhams, Goals Soccer Centres and French Connection.

House of Fraser went into administration today having been plunged into fresh crisis after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.

C.banner was planning to buy a 51 per cent stake in House of Fraser and plough £70million into the ailing retailer, but scrapped the move last week. 

House of Fraser chairman Frank Slevin said today: ‘This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan.

‘Despite the very recent termination of the transaction between Cenbest and C.Banner, I am confident House of Fraser is close to securing its future.’

Alex Williamson, chief executive of House of Fraser, said: ‘We are hopeful that the current negotiations will shortly be concluded.

‘An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength’. 

House of Fraser's flagship store in Oxford Street (pictured) was one of those set for closure

House of Fraser's flagship store in Oxford Street (pictured) was one of those set for closure

House of Fraser’s flagship store in Oxford Street (pictured) was one of those set for closure

House of Fraser pension pot will not have a BHS black hole

Fears that the House of Fraser pension pot could face a BHS-type black hole crisis was dismissed today.

The Pension Protection Fund will assess the firm’s giant pension scheme but it is said to be in a healthy position.

This means it will be sold off to a private insurer and Sports Direct will not have anything to do with its management.

But there are concerns about the pay and conditions of the 17,000 staff being transferred to Sports Direct.

Scott Lennon, of the union Unite, said: ‘Sports Direct is a leopard that has not changed its spots and we hope that its poor record on pay and employment practices are not transferred to the House of Fraser.

‘Sports Direct’s record at the Shirebrook warehouse operation in the East Midlands has been dreadful and, despite the recent terrible publicity, wages remain at the minimum legally payable, and the terms and employment conditions are threadbare.

‘We fear for jobs and employment conditions at the House of Fraser going forward. The staff are entering a period of great uncertainty and worry.’

Prior to the latest crisis, House of Fraser had recently agreed a so-called Company Voluntary Arrangement (CVA) with landlords to close half of stores, with 6,000 jobs in the firing line.

Under the rescue plan the chain’s flagship Oxford Street store would have closed along with 30 others including those in Birmingham and Edinburgh. 

The firm, brought by Chinese firm Sanpower for £480million in 2014, would have no stores left open in Wales stores as both the Cardiff and Cwmbran branches were set for closure.

The department store’s struggles are the latest big-name blow to the British high street which is facing crisis as chains increasingly are shutting stores to focus on online sales. 

The retail sector is Britain’s biggest employer with 4.6million working in the industry.

But in recent years as shoppers move online, jobs have increasingly been put as risk with the likes of New Look and Marks and Spencer announcing store closures this year and Maplin and Toys R Us closing altogether. 

Fraser and James Arthur in Glasgow in 1849 as a drapery shop called Arthur and Fraser. It took on its current name in 1941. 

In 1985 it was bought out by the Fayed brothers, the owners of Harrods, for £615million, who floated the company on the London stock exchange began a major refurbishment of the department store.

The chain launched online in 2007 and opened its first international store in 2013 in Abu Dhabi. 

Newcastle fans and ex-players left stunned by Mike Ashley’s House of Fraser purchase and ask: ‘What position does he play?’

After a quiet transfer window fans of Mike Ashley’s Newcastle United joked House of Fraser was a new player. 

Record goalscorer Alan Shearer posted a link the the business news and said: ‘What position does he play?’

Mr Ashley previously promised manager Rafael Benitez ‘every penny generated’ by the club to spend on transfers, but the Magpies ended the window with an estimated net profit of more than £15million.

Their most expensive signing this summer was Yoshinori Muto from German side FSV Mainz 05 for an estimated £9.5million. 

In response to the news of the buyout of House of Fraser, Shearer’s former Newcastle teammate, Steve Howey, tweeted: ‘After my rant yesterday on the BBC about where has the money gone and no one could answer… now we know.’

One Newcastle fan tweeted: ‘Mike Ashley buying a crumbling high street retailer for £90million amidst protests about where our 100million in TV money that was promised to Rafa has gone, the day after the transfer window closes, says it all.’ 

Pint-drinking billionaire nicknamed The Chav King of the High Street whose Sports Direct empire started with a single sports shop and a £10,000 loan

Close: Mike Ashley and his ex-wife Linda have rekindled their relationship 12 years after their divorce

Close: Mike Ashley and his ex-wife Linda have rekindled their relationship 12 years after their divorce

Close: Mike Ashley and his ex-wife Linda have rekindled their relationship 12 years after their divorce

Former squash coach Mike Ashley started his business career in a Maidenhead sports shop and went on to become one of Britain’s richest men.

No doubt he is a ruthless and successful businessman but he has often appeared more comfortable with a pint in his hand at the football than in a suit on business and is a self-confessed ‘power drinker’.

An extraordinary court case last year heard Mr Ashley vomited in a pub fireplace at a company meeting after downing 12 pints of lager during a drinking competition with a colleague, a court has heard.

The Newcastle United owner allegedly held senior management meetings which turned into ‘pub lock-ins’ involving flowing alcohol, kebabs and drinking games, a judge was told.

He would also lie under tables and ‘take a nap’ at meetings he found boring, it was alleged.

Billionaire Mr Ashley is from a humble background and has developed a reputation for frugality.

Even when he was on his path to making his millions he preferred to drive around in a clapped-out Vauxhall Cavalier while his glamourous Swedish wife Linda had a Aston Martin DB4.

But this didn’t last forever because Mr Ashley traded it in for a new Ford Sierra a few years later.

Mr Ashley’s 33-room pillared mansion in London’s Beverly Hills in Barnet has a sweeping drive, four garages and its near-neighbours are said to include Arsene Wenger and several members of One Direction.

It is a world away from when he started Sports Direct 34 years ago with a £10,000 loan from his parents.

He built it up from a single shop in Maidenhead, Berkshire, into one of the nation’s most successful retailers and holds a 55 per cent stake in the company, currently valued at around £1.4 billion.

Never mind that most of the tracksuits and training shoes he sells are worn by unsporty couch-potatoes rather than gym bunnies, or that the rough-diamond entrepreneur has been nicknamed The Chav King of the High Street.

No doubt he is a ruthless and successful businessman but Mr Ashley, left at a Newcastle match, has appeared more comfortable with a pint in his hand at the football than in a suit on business

Sports Direct’s trophy assets include the prestigious Lillywhites sportswear emporium at Piccadilly Circus, and world-famous brands including Dunlop, Everlast and Slazenger.

Along the way, Mr Ashley has been dogged with controversy — particularly over allegedly ‘Dickensian’ working conditions at the company’s main warehouse in Shirebrook, Nottinghamshire.

Management meetings are frequently held in the nearby Lion Hotel, and can last until 3am. Sports Direct’s senior executives live locally in a cluster of houses, worth around £400,000 each.

However, there is a limit to his frugality: Mr Ashley has a helicopter to fly between his mansion and the office. He also bought Newcastle United but many fans are not keen on him. For a period he was unable to take his family to matches for fear of abuse.

He said at the time: ‘I’m a dad who can’t take his kids to a football game on a Saturday because I’m advised we would be assaulted.’

For most of the working week, he’s at the company’s unglamorous nerve-centre in Shirebrook.

The billionaire does not even have his own office but holds court from a desk in the middle of an open-plan office, where he sits until around 2am on some days.

A gardener who works on another house next door to Mr Ashley’s Barnet home said he sees the billionaire’s helicopter fly over almost every Wednesday.

His 50-year-old ex-wife Linda, who bears a resemblance to fellow Swede Britt Ekland, marched down Whitehall in a white dress, sunglasses and heels to support the under-fire businessman as he faced MPs in June this year.

And after a 12-year break it was also confirmation they are back together – but despite the rekindled romance MailOnline understands they still live in separate mansions just a mile apart.

After their divorce interior designer Mrs Ashley, who is mother of the billionaire’s three children, went on to have a relationship with businessman Simon Brodin, an ex-boyfriend of S Club 7 pop star Rachel Stevens, and had a son, Tyler, now 12, by him.

But in 2014 Mrs and Mrs Ashley were seen stepping into his Bentley after a series of central London dates, including a key dinner in a local curry house.

The famously reclusive billionaire has barely given an interview for a decade and never comments on his private life – but friends have previously claimed he could propose to his ex-wife again and had even lost weight after finding happiness with her again.

While he toils away in Shirebrook, his adult children Ollie, 25, Anna, 24, and Matilda, 19, and ex-wife, enjoy a more extravagant existence.

While their father is known to shun expensive suits for his scruffy jeans, untucked shirts his daughters are just as glamourous as their mother. The blonde sisters have model good looks and the wardrobes to match.

In behaviour similar to the daughters of another swashbuckling business/sporting tycoon — Formula 1’s Bernie Ecclestone — Matilda’s social media profiles are full of glamorous selfies.

Linda Ashley has been seen at society events and is an interior designer.

Decline of the High Street: The retailers struggling to stay afloat as online rivals take their customers

Toys R Us: The toy chain went into administration on the last day of February after failing to find a third-party buyer. In February, HMRC sought to recover £15 million in unpaid VAT and this finally tipped the company into administration.

Maplin: One of the UK’s biggest electronics retailers collapsed into administration on the same day as Toys R Us after talks with buyers failed to secure a sale. The business faced the slump in the pound after the Brexit vote, weak consumer confidence and a withdrawal of credit insurance.

Conviviality Retailing: The major drinks and off-licence supplier that owns Wine Rack and Bargain Booze went into administration in early April. The company had grown too quickly by merger, there were a series of profit warnings and a £30 million tax bill for which Conviviality was forced to ask for extra funds from investors – who refused.

Warren Evans: The bed, mattress and furniture retailers in London and the South East went into administration one week after putting itself up for sale. The retailer, known for its ethical stance, had been losing money for some time under the pressure of rising costs and shrinking customer spending.

Calvetron: The owner of Jacques Vert, Windsmoor, Dash and Eastex fashion brands that ran about 300 UK concessions in stores including Debenhams and House of Fraser, went into administration at the start of May. Bosses said inflation and wage freezes had been a driving force behind decreased spending.

Juice Corporation: The firm behind fashion brand Joe Bloggs and the retailer that designed the wedding dress for Diana, Princess of Wales, collapsed into administration in January. Although the group made profits, it had failed to make inroads into the fashion market.

Mothercare: The ailing baby goods and maternity retailer has proposed to close 50 stores as part of a planned turnaround for the company. It said losses were driven by the costs of 17 store closures last year, onerous leases and a head office restructure which resulted in 190 job cuts.

Carpetright: The embattled flooring firm is embarking on a store closure programme and has begun efforts to raise £60 million in emergency funding as it pushes through a restructuring after announcing it was expecting to book a full-year underlying pre-tax loss of between £7 million and £9 million.

Carluccio’s: The upmarket deli chain has unveiled a restructuring plan that will likely lead to 34 restaurant closures as it cited a combination of a gradual decline in consumer spending and increasing competition, coupled with the rising costs of labour, raw materials, rent and business rates.

Other restaurants that have undertaken company voluntary arrangements so far this year include Byron, Prezzo and Jamie’s Italian.

New Look: The clothing chain announced earlier this year that it would close 60 UK stores and cut 1,000 jobs as part of a financial restructuring. 



Source link