House of Fraser’s flagship store on London’s Oxford Street has been saved from closure after new owner Mike Ashley struck a deal with landlords and suppliers to keep the store going.
When Sports Direct owner Ashley acquired the House of Fraser chain earlier this month, he pledged to keep up to 47 of its 59 stores open, while a CVA proposal put forward by its previous owners was set to lead to the closure of 31 stores, along with the Oxford Street flagship.
Immediately after the acquisition, Ashley appointed real estate services and investment firm CBRE to begin negotiating with landlords about saving as many stores as possible with Oxford Street believed to be a priority.
James Keany, head of national agency at CBRE, said the deal only came about because “all parties realised it was better to keep the store open and fully operational”. “It was a real case of landlord and tenant genuinely working together and at great speed. Everyone was sensible about the terms of the transaction,” he added.
Sports Direct’s head of elevation Michael Murray said the speed at which the deal was struck was a sign of the the business’s commitment to its rescue plan. “We said we would keep as many stores open as possible, and in less than a week we have saved the biggest store. Oxford Street was meant to close in January and now it’s safe, which is great news for all parties,” Murray said.
“Everyone must remember it was a bust business and we need landlords, councils and brands to pull together to save House of Fraser on the high street,” Murray added.
The deal brings some much needed good news for Sports Direct as a dispute over payment of a £30m debt racked up by the store’s previous owners with logistics supplier XPO has kept its website offline since the end of last week. XPO has since placed more than 600 jobs at risk as a result of the debt, which was effectively wiped out when administrators Ernst & Young placed House of Fraser into administration briefly to enable the chain’s sale to Ashley’s Sports Direct for £90m in a pre-pack deal.
Pictured: James Keany of CBRE and Eleanor Dalley, general manager of House of Fraser Oxford Street