House of Fraser goes into administration as website goes OFFLINE – Mike Ashley to buy

The jobs under threat include those working on brand concession stands within the department store and those that work directly for the retailer.

It is set to close 31 of its 59 stores – affecting 6,000 jobs – but is currently seeking funding to continue its survival.

According to Sky News, Sports Direct tycoon Mike Ashley, who already has an 11 percent stake in the business, is close to striking a deal to buy House of Fraser.

Sources close to the discussions said the takeover could be announced later on Friday, although it could yet fall through or see its interest trumped by another party.

The department store chain said talks between interested investors and its main creditors did not result in a “solvent solution” and had no choice but to appoint administrators. 

But House of Fraser, which lost £44 million last year, said parts of its business could still be rescued, most likely through a pre-pack administration, where a new buyer cherry picks the most valuable assets.

It said “significant progress has been made” in reaching a sale of the group’s business and assets. 

EY is expected to be appointed as administrators today and will likely continue discussions in the hope of reaching a deal “shortly after their appointment”. 

The department store chain insisted its offices and stores will continue to trade as normal while attempts to rescue the business continue. 

House of Fraser administration

House of Fraser is set to enter administration on Friday (Image: GETTY)

House of Fraser chief executive Alex Williamson said: “We are hopeful that the current negotiations will shortly be concluded.

“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.”

On Thursday, House of Fraser, which began trading in 1849, admitted it needed to secure new funding within the next few weeks in order to survive and keep the business afloat amid high rents and stock purchases. 

Mike Ashley House of Fraser

Mike Ashley is reportedly close to striking a deal to buy House of Fraser (Image: GETTY)

The struggling department store chain is in dire need of fresh finance to help it pay its quarterly rent bill, which is due in September, as well as fund the purchase of stock. 

Sources had told the Guardian the department store was looking at a squeeze in finance that could result in the giant falling into administration. 

It will have to pay suppliers £15m ahead of monthly rent bills, which are due by the August 20.

C.Banner, the Chinese owner of Hamleys, had been planning to buy a 51 percent stake in House of Fraser and invest £70 million into the retailer, but scrapped the move last week. 

If House of Fraser did collapse, it would amount to the biggest high street failure since Woolworths went under with the loss of 30,000 jobs a decade ago. 

House of Fraser administration

House of Fraser’s falgship store on Oxford Street was set to close (Image: GETTY)

In June, the retailer was given approval by creditors to close 31 stores (listed below), including its flagship store on Oxford Street in London, resulting in a total of 6,000 job losses.

The department store chain had warned it did “not have a viable future” unless creditors and landlords backed its proposals. 

House of Fraser became the latest high street giant to seek a Company Voluntary Agreement (CVA) in an attempt to avoid becoming a casualty of the crisis that is engulfing retailers. 

It had secured the backing of more than 75 percent of its creditors, including landlords.

Debenhams House of Fraser

Mike Ashley also has a 30 percent stake in House of Fraser rival, Debenhams (Image: GETTY)

Earlier this week, Homebase outlined plans to close around 60 stores by mid-August, threatenin more than 1,000 jobs. 

In May, Australian conglomerate Wesfarmers offloaded the entire 250 store estate of the home improvement retailer and garden centre and sold it to turnaround specialist Hilco Capital for a nominal sum, thought to be as little as £1.

House of Fraser has become the latest high-profile rtailer to fall into administration this year, following Maplin, Poundworld and Toys R Us, triggering around 10,000 jobs losses. 

A number of others, including Carpetright, New Look and Mothercare, have all turned to CVAs to raise hopes of survival but at the cost of thousands of jobs.

House of Fraser stores to close:

Altrincham

Aylesbury

Birkenhead

Birmingham

Bournemouth

Camberley

Cardiff

Carlisle

Chichester

Cirencester

Cwmbran

Darlington

Doncaster

Edinburgh Frasers

Epsom

Grimsby

High Wycombe

Hull

Leamington Spa

Lincoln

London Oxford Street

London King William Street

Middlesbrough

Milton Keynes

Plymouth

Shrewsbury

Skipton

Swindon

Telford

Wolverhampton

Worcester

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