House of Fraser to appoint administrators after investment talks fail

The troubled department store needs new funding by no later than next week

House of Fraser in The Oracle.

Sports Direct now owns all House of Fraser assets including its brand, stores and stock.

Sports Direct boss Mike Ashley has reportedly bought the store chain for £90million after it went into administration.

The move means the company will takeover all the stores, including the one in The Oracle in Reading, Berkshire.

"The directors of the group's operating companies, House of Fraser (Stores) Limited, House of Fraser Limited and James Beattie Limited (the "Operating Companies"), have therefore resolved to seek the appointment of administrators".

Two months ago, the company announced that the Worcester store was to close in 2019 with the loss of 149 jobs.

The company said "significant progress has been made" in reaching a sale of the group's business and assets.

It is not known at this time what plans the new owners, led by tycoon Mike Ashley, who also owns Newcastle United Football Club, have for the business.

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Alan Hudson of EY, joint administrator, said: "We have worked very closely with management, its advisors and creditors in recent weeks and are pleased that we have been able to successfully conclude a sale of the business in short timescales which preserves as numerous jobs of House of Frasers employees as possible".

The department store chain, with a branch in Worcester's Crowngate, said discussions between interested investors and its main creditors did not conclude in a "solvent solution" and it has no choice but to appoint administrators.

"All stores will be open for business as usual today", it said in an announcement to the Luxembourg Stock Exchange.

House of Fraser at Rushden Lakes will be open as normal today (Friday) despite the company calling in the administrators.

Alex Williamson, chief executive of House of Fraser, said: "An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength".

However, doubt remains over the long-term future of jobs and whether Mr Ashley will shut underperforming stores as part of a restructuring programme.

House of Fraser was plunged into crisis last week after C.banner, the Chinese owner of Hamleys, pulled its investment in the troubled retail chain. It is understood that House of Fraser is up to date with payments to suppliers, but may need to find about £15million ahead of monthly rent bills due before the end of August.

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