Sports Direct takes over House of Fraser for 90 million pounds
The British sporting goods retail chain has acquired all business assets, including the stores and the stock, of the department store chain, which went into administration.
Sports Direct rescues House of Fraser. The British department store chain has been acquired out of administration by the sporting goods retailer for 90 million pounds (99 million euros). Earlier today, the group appointed EY as administrators and said the business will continue trading while it tried to complete a sale.
The deal reached with Sports Direct includes all House of Fraser stores in United Kingdom, the company’s stock, the trademark and all group shares. The department store chain operates with 59 centres in the country and employs around 5,000 employees.
House of Fraser was in a delicate situation since last week, when C.Banner, owner of toy retailer Hamleys, cancelled the acquisition process after months of negotiations. As it was planned, C.Banner would have taken a 51% stake in the business to invest 70 million pounds (79.8 million euros) in the aching company.
House of Fraser went into administration this morning, after it failed to reach an agreement with any of the frontrunners to buy the business
Mike Ashley, owner of Sports Direct, was already a shareholder of House of Fraser, as well as in other retail businesses such as Debenhams, JD Sports and intimates label Agent Provocateur. As of yesterday, Ashley, Edinburgh Woollen Mill's owner Philip Day and turnaround specialist Alteri Investors were among the favourite candidates to rescue House of Fraser.
House of Fraser ended the last fiscal year (closed on January 28, 2017) with assets amounting to 946.3 million pounds (1,051.3 million euros) and a net profit of 14.7 million pounds (16.3 million euros). Sports Direct registered revenues of 3.36 billion pounds (3.7 billion euros) in fiscal 2017, up 3.5%. Profit before tax reached 77.5 million pounds (87 million euros) in the same period.
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