House of Fraser chain goes into administration

Shoppers outside House of Fraser

House of Fraser is scrambling to secure a backer before its cash runs out

Since then, it has been revealed that Mike Ashley's Sports Direct has struck a deal to rescue House of Fraser out of administration for £90 million, raising hopes for the future of thousands of staff. "Retailers that provide the right experience and service are really adapting the way that people shop, and as a result, are changing the requirement for the bricks and mortar store so it would be interesting to understand Sports Directs' take on this and whether they really relish the challenge and are able to adapt House of Fraser's customer experience through online, physical and social sales, in order to keep apace and meet the consumers requirements of today perhaps utilising in part the Flannels facia".

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 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".

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".

Billionaire Ashley, who also owns English Premier League soccer club Newcastle United, said on Friday his ambition was to transform House of Fraser "into the Harrods of the High Street" - a reference to the Qatari-owned luxury department store in London that was once owned by House of Fraser.

" In addition, it will be interesting to see how Sport's Direct's multichannel experience could help to turn around House of Fraser's department stores' ill-fate".

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

HoF chief executive Alex Williamson said: "We are hopeful that the current negotiations will shortly be concluded".

House of Fraser was plunged into crisis last week after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.

"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".

But it had the benefit of giving those workers six months to try and find new jobs.

A woman leaves a House of Fraser store in Bristol, Britain, August 10, 2018.

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