(Image credit: Flannels)
It was announced earlier today that retailer Sports Direct is to take on House of Fraser in a deal worth £90m, just hours after the 169 year-old department store chain officially went into administration.
Creditors for House of Fraser failed to reach an agreement to enable the company to continue trading, following which the following statement from Sports Direct was released:
“Sports Direct International plc (“the Company” or “the Group”) announces the acquisition of the business and assets of House of Fraser from the administrators 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”), for a cash consideration of £90 million (the “Transaction”).”
The deal sees Sports Direct acquire all of House of Fraser’s UK stores, along with the House of Fraser brand and all of the stock in the business.
Sports Director owner Mike Ashley already held an 11% stake in the department store chain.
While it was not yet clear what his plans for the House of Fraser stores are, some industry commentators have suggested it could include rebranding some of them as Sports Direct outlets.
Others have suggested that the House of Fraser brand could be taken more upmarket by aligning it with Flannels, which sells brands like Burberry and Fendi.
Founded in 1976 by Neil Prosser, who remains the managing director, Flannels actually started life in Cheshire – at 88 King Street in Knutsford.
A second outlet was opened in Altrincham four years later, and the company expanded into Manchester city centre in 1987.
Sports Direct bought a 51% stake in the business in 2012.
Today Flannels has 24 stores (with a further three opening soon), which compares to 59 stores currently trading under the House of Fraser brand.
Flannels is credited with introducing major international designers to the North West for the very first time and is described on its website as “One of the UK’s leading luxury retailers, specialising in contemporary men’s and women’s designer clothing, footwear and accessories.”
Its brand portfolio includes Gucci, Dolce & Gabbana, Moncler, Jimmy Choo, Stone Island and Kenzo.
In a statement, shared by the Manchester Evening News, Mr Ashley said: “This is a massive step forward and further enhances our strategy of elevation across the Group. This will benefit both House of Fraser and Flannels in the luxury sector.
He added: “We will do our best to keep as many stores open as possible.
“It is vital that we restore the right level of ongoing relationships with the luxury brands. Our deal was conservative, consistent and simple.
“My ambition is to transform House of Fraser into Harrods of the High Street.”
What are your thoughts on the House of Fraser collapse? Would you like to see it more closely aligned with high-end Flannels, or would you prefer to see it make way for Sports Direct stores?
What changes would be needed for you to consider shopping in a House of Fraser store? Let us know in the comments box.
