// Sports Direct reconfirms commitment to House of Fraser stores amid reports of closing them down after Christmas
// The retail tycoon has previously described the department store chain as “nothing short of terminal”
// News comes after Frasers, a House of Fraser spin-off, was announced for Wolverhampton
Sports Direct has said it has entered into new leases on the majority of its House of Fraser stores and that it was “working rapidly” on its investment scheme for the chain.
The statement from the Mike Ashley-owned company comes after a report in The Sunday Telegraph suggested that Sports Direct planning to shut down almost all House of Fraser stores once the crucial Christmas trading period comes to an end.
The article also suggested Sports Direct was either not paying rent or preparing to end the leases on most of its 50 or so remaining stores in the UK.
However, Sports Direct strongly rejected this.
READ MORE:
- Sports Direct picks Wolverhampton’s Debenhams to rollout Frasers concept
- House of Fraser extends administration for another year
“The Telegraph article refers to ‘fresh papers from administrators EY’, which is the progress report for the administration of HFL Realisations Limited (formerly House of Fraser Limited, which went into administration in 2018),” Sports Direct said in its statement.
“This refers to a number of leases being surrendered for £nil and a small number of property leases remaining to be dealt with.
“Please note that the surrenders relate to the leases between the landlord and the old House of Fraser company and have nothing to do with Sports Direct Group including the new House of Fraser group.
“Sports Direct has entered into new leases on the majority of House of Fraser stores.
“The EY report relates to an entirely different company. Sports Direct continues to work with landlords across the whole of the remaining House of Fraser estate.
“As a result of this erroneous misreading of the administrators report from EY, staff across the HoF group have today woken up to a false sense of job insecurity.
“Sports Direct is working rapidly on our ongoing investment programme with the HoF brand and it is therefore totally incorrect to assume that there will be large numbers of store closures in the new year.
“We are taking legal advice with regards to this unbelievable level of misreporting.”
Sports Direct first bought House of Fraser out of administration for £90 million last year in August.
At the time, Ashley’s retail empire took control of 64 sites, including three offices, two warehouses and 59-strong store estate.
While a handful of House of Fraser stores have shut down since Sports Direct’s takeover, speculation has been rife that more closures were to be expected this year.
In its full-year report published at the end of July, Sports Direct admitted that House of Fraser was in terminal decline and that more stores may need to close.
Sports Direct also didn’t provide financial guidance for House of Fraser for the financial year ahead and admitted it would have thought again at acquiring the department store.
On its own, House of Fraser recorded a full-year operating loss of £54.6 million on the back of revenues of £330.6 million.
Just weeks after the full-year results, creditors extended House of Fraser’s administration for another year.
Ashley has also previously indicated his plans to close several House of Fraser stores as he prioritises plans to launch Frasers, an upmarket spin-off from the brand.
Last week it was revealed that Sports Direct was due to unveil its new Frasers concept via a 94,000sq ft flagship in Wolverhampton’s Mander Centre.
Frasers will move in to the unit that will be vacated by Debenhams in January 2020, as part of the latter’s own CVA plan.
Currently, the House of Fraser flagship in Glasgow operates under the Frasers name, so the new Wolverhampton store is expected to be the start of a rollout for the upmarket fascia.
Previous reports have suggested that Sports Direct is eyeing somewhere between 15 to 31 House of Fraser stores that could receive millions of pounds of investment over the next five years in order to relaunch the department store chain and take it upmarket under the Frasers brand.
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