House of Fraser appoints administrators

House of Fraser administration

House of Fraser is set to enter administration on Friday

His Sports Direct company struck a deal to rescue the chain from administration for £90million, raising hopes for the future of thousands of staff.

The CVA, which as well as 31 store closures included rent reductions at 10 further locations, was agreed in June, but was subsequently challenged by a cohort of landlords - although this challenge was soon settled by HoF, the dispute was cited by C.banner as a reason for backing away, with the group cancelling a share placing that might have funded the deal.

The firm added: "Significant progress has been made towards completing a sale of the group's business and assets".

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". Stores were delaying opening until 11am, however.

The billionaire, who also owns Newcastle United, said that Sports Direct will "do our best to keep as many stores open as possible".

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".

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

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

"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". Even within a struggling industry, the likes of House of Fraser look like relics of the Edwardian era, about as relevant to the 21st century as typewriters and video players.

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

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.

While the department store entered rescue talks with a number of different companies, these have continued to break down over the past few months. "The demise of House of Fraser in many ways has been the result of poor leadership, paralysis in innovation and crippling levels of debt", Mr Lim added.

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