House of Fraser’s flagship Oxford Street store in Central London has been saved from closure.
The store was due to close before the group went into administration under a company voluntary arrangement (CVA). Now owned by Sports Direct, the group announced on Tuesday that it would remain open.
“We said we would keep as many stores open as possible, and in less than a week we have saved the biggest store,” said Sports Direct’s (LON: SPD) Michael Murray.
“Oxford Street was meant to close in January and now it’s safe, which is great news for all parties. Everyone must remember it was a bust business and we need landlords, councils and brands to pull together to save House of Fraser on the high street,” he added.
Soon after House of Fraser fell into administration, Sports Direct boss Mike Ashley bought the group in a £90 million deal.
James Keany, from CBRE, the real estate services and investment firm advising Sports Direct on House of Fraser said: “This deal only happened because all parties realised it was better to keep the store open and fully operational.”
“It was a real case of landlord and tenant genuinely working together and at great speed. Everyone was sensible about the terms of the transaction.”
Mike Ashley has said he hopes to transform House of Fraser into the “Harrods of the high street”.
On Monday, Mulberry (LON: MUL) warned that it was expecting to take a £3 million hit to its profits after the collapse of the department store. Following the news, shares in Mulberry plunged 30 percent after the profit warning.
“Since the group reported in June 2018, the UK market has continued to remain challenging and sales in House of Fraser stores have been particularly affected,” said the group in a statement.
“If these sales trends in the UK continue into the key trading period of the second half of the financial year, the group’s profit for the whole year will be materially reduced.”
“Trading in the rest of the world continues to develop broadly in line with management’s expectations. The group is in a strong cash position and continues to follow its strategy to develop Mulberry into a global luxury brand.”
