House of Fraser’s flagship Oxford Street store is saved
House of Fraser’s flagship Oxford Street store will now stay open after the chain’s new owner agreed revised terms with its landlord. The store had been due to close under a restructuring plan that House of Fraser announced in June.
However, the department store group fell into administration earlier this month, and was bought by Mike Ashley’s Sports Direct. The deal is the first covering a House of Fraser store since the takeover.
The store was one of the 31 earmarked for closure under the CVA restructuring deal that was first struck before Mr Ashley stepped in with his £90m rescue bid.
His plan is to keep 80% of House of Fraser’s 59 stores across the UK open. A spokesperson said they were working through the list on “a store-by-store basis”.
Property giant CBRE, which is advising Sports Direct, said negotiations over the Oxford Street outlet had been conducted at “great speed”.
James Keany from CBRE 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’s Sports Direct bought the chain just hours after it went into administration earlier this month.
This means it is not legally obliged to pay suppliers money owed before its £90m buyout, as their debts were part of the administration.
Mr Ashley has said he intends to turn the chain into the “Harrods of the High Street”. On Monday, it was revealed more than 600 jobs were under threat at two House of Fraser warehouses which supply deliveries to stores and customers.
The GMB union said 627 staff at the two warehouses were told on Friday that they were at risk of redundancy.
XPO Logistics operates the sites, in Northamptonshire and Buckinghamshire. Last week, it stopped processing orders due to a payment dispute, forcing the retailer to cancel and refund all online orders.
The company was thought to be owed £30.4m by House of Fraser when it fell into administration, according to administrator EY, but sources close to the the warehouse operator say it is owed around £12m.
XPO Logistics is one of a number of suppliers that have been left out of pocket. In total, EY has estimated suppliers are owed £484m.