The department store chain was acquired by Sports Direct after it appointed administrators this morning and faced ending 169 years of trading.
Mere hours after House of Fraser revealed it had called in Ernst & Young when “discussions with interested investors and its main secured creditors have not concluded in a solvent solution”, Sports Direct International plc announced it had acquired the business from the administrator.
The £90million deal includes the business and assets of House of Fraser Limited, House of Fraser (Stores) Limited and James Beattie Limited, the House of Fraser group's main operating companies (the "Operating Companies") and means that Sports Direct will take on the House of Fraser brand, all UK stores and all of the stock in the business.
The last-minute save by Sports Direct, which already had an 11% stake in the business and also has a share of nearly 30% in Debenhams, raises hopes that some of the 17,500 jobs, including 12,500 concession positions, at risk by House of Fraser’s administration could be rescued.
The announcement follows months of drawn-out negotiation between House of Fraser and its landlords, as well as Chinese firm C.Banner, which backed out of a £150million rescue plan just two weeks ago.
Before the Sports Direct Deal was announced mid-morning, House of Fraser chief executive Alex Williamson commented on the process: “In the two weeks since the Cenbest and C.Banner transaction ceased, the directors have brought forward a number of potential buyers and the Group’s financial advisors have run a comprehensive M&A process to identify and then develop other third party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace.”
House of Fraser chairman Frank Slevin added: “This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan. 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.”
The pair will no doubt be relieved that a buyer was found so soon, as the breakdown in negotiations over the C.Banner sale left House of Fraser needing to find £40million to pay rent on its estate by August 20 to avoid going under.
All stores will be open for business as usual today, including 31 that have already been earmarked for closure as part of a CVA.
The latest financial results available for the company reveal House of Fraser Group reported gross assets of £946.3million and a £14.7million net profit for the year ended January 28, 2017.