Mike Ashley’s Sports Direct has agreed to buy the House of Fraser department store chain for £90m.
Earlier today, House of Fraser went into administration after talks between the retailer and its creditors failed to reach an agreement.
All of its 59 shops were set to open as usual on Friday, including the 31 that had already been marked for closure.
House of Fraser – which began trading 169 years ago – employs 17,500 people, including 11,500 concession staff.
Sports Direct said in a statement: “The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business.”
Mike Ashley already held an 11% stake in the department store chain.
Mr Ashley’s plans for the stores chain are not clear, but could include rebranding some stores as Sports Direct.
Previously he had said he wanted to turn the sporting goods fashion chain, which he founded in 1982, into “the Selfridges of sport”.
As well as 750 Sports Direct stores, Mr Ashley has investments in Debenhams and French Connection and owns the clothing chain Flannels.
Earlier on Friday, House of Fraser had gone into administration after rescue talks had “not concluded in a solvent solution”.
Other contenders to take over the store chain included Mike Ashley’s retail rival Philip Day, who owns the Edinburgh Woollen Mill chain, Jaeger and Austin Reed.
Earlier this month, Chinese firm C.banner pulled out of a rescue deal.
Before that, House of Fraser had agreed a Company Voluntary Arrangement (CVA) with its creditors, under which would have closed 31 stores, putting 6,000 jobs at risk.
Speaking about the announcement Michael Mulligan, insolvency specialist at Shakespeare Martineau, said: “Now that Sports Direct has acquired the House of Fraser brand – including all of the stock in the business – it will allow continued operation with a likely focus on the flagship stores.
“This will be welcome news not only for suppliers who rely on House of Fraser for their livelihoods, but also for all employees involved.
“This is yet another significant High Street rescue mission and the crisis shows no sign of abating. With interest rates rising and less money in the pocket of the UK consumer, more household names may be at risk.”
Retail expert Dr Fletcher from the University of Salford added: “For a 169 year old retailer with a reputation for stability it has been a fast moving week for House of Fraser. The last 48 hours has seen the future of the brand hang in the balance as decisions in the boardroom have put jobs and pensions in doubt. “With a £40 million hole in its finances that needed to be filled by the 20th August an urgent solution was required.
After rejecting offers from Mike Ashley’s Sports Direct and Philip Day’s Edinburgh Woollen Mills groups as well as bailout specialist Alteri yesterday, House of Fraser was faced with no other solution and went into administration this morning. “Now in the hands of its administrators, Mike Ashley has again made an offer to takeover over the retailer, and that offer of £90m has now been accepted. “While this could be seen as indecision from House of Fraser’s board, it makes good business sense for Ashley. In administration, Ashley will be able to choose which parts of House of Fraser he wants and those parts he does not.
This almost certainly will leave at least part of the pension fund in the hands of the Pension Protection Fund as well as the continued prospect of job losses but helps to keep the doors open at some House of Fraser locations including the iconic former Kendal’s site on Deansgate, Manchester.
That is in a prime location and Ashley seems to want upmarket and inner-city locations. “A takeover will see House of Fraser become part of a group that includes Sports Direct and 30 per cent of Debenhams. The advantages brought by the warehouses and logistics already managed by this group will be an important key in the recovery of the House of Fraser’s fortunes.
So House of Fraser may well survive but it might look a bit different under the new regime!”