Sports Direct buys House of Fraser in £90m deal

Sports Direct acquired House of Fraser for £90 million within hours of the department store group going into administration on 10th August.

The deal includes all UK stores, the HoF brand, and all the stock in the business.

Alan Hudson, Hunter Kelly, Colin Dempster and Craig Lewis from EY’s restructuring team were appointed administrators following the withdrawal of a proposed investment in the business by Cenbest and C.Banner.

House of Fraser has 59 department stores across the UK and Ireland employing more than 5,900 people. There are also 10,100 people are employed in the various concessions within the stores.

It operates a national distribution centre in Wellingborough, while online sales are handled from an e-commerce distribution centre in Milton Keynes.

For the year ended 28 January 2017 the House of Fraser group had gross assets of £946.3m and made £14.7m net profit.

In June HoF put forward a CVA plan that involved closing 31 of its 59 stores and becoming an e-commerce led retailer ‘offering a seamless multi-channel proposition and integration between in-store and online experience”. This depended on additional funding. But a deal with Cenbest and C.Banner fell through and the company failed to find another investor making administration the only option.

Joint administrator Alan Hudson 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 many of the jobs of House of Frasers employees as possible. It was a challenging transaction to achieve in such a short period of time which will ensure continuity of the business and preserve the goodwill. We hope that this will give the business the stable financial platform that it requires to flourish in the current retail environment.”

Sports Direct already holds a 29.7 per cent stake in rival department store chain Debenhams. It also holds a 29.9 per cent stake in online retailer Findel.

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