Sports Direct buys House of Fraser out of administration

The exterior of the King William Street branch of House of Fraser can be seen here in central London

The exterior of the King William Street branch of House of Fraser can be seen here in central London

"The group has acquired all of the United Kingdom stores of House of Fraser, the House of Fraser brand and all of the stock in the business".

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"Court hearings are expected to take place at 7.30 am today, at which orders will be sought appointing individuals from Ernst & Young LLP as administrators of each of the operating companies with immediate effect".

House of Fraser assured that its offices and stores will continue trading as normal while they look to reach a deal. It it not clear how many of its 59 shops or 17,000 staff employed by the chain and its concession holders would be affected.

It is not clear what will happen now to those stores and their workforce following the takeover by Mr Ashley.

"House of Fraser confirms that discussions continue with interested investors and its main secured creditors, which are focused on concluding as quickly as possible to enable receipt of an investment required by no later than 20 August 2018", the group said in a statement on the Luxembourg Stock Exchange. 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.

Prior to its collapse, Mr Ashley had held an 11% stake in the department store chain.

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The deal will see the tycoon tighten his grip over the British high street, adding to his sports retailing and "premium fashion" empire.

The billionaire has also built up stakes in rivals such as Debenhams, Goals Soccer Centres and French Connection.

Two months ago, the company announced that the Worcester store was to close in 2019 with the loss of 149 jobs.

House of Fraser had said in June it needed to shut 31 stores and make up to 6,000 people redundant to survive, but that rescue programme was thwarted after Chinese group C.banner pulled out of a plan to inject fresh equity.

The company saw its business rates bills rise £3.99 million to £30.24 million this year following a Government revaluation, according to research group Altus. The combination of both businesses will yield some vital cost-saving synergies while it's likely that some of the struggling House of Fraser sites will be rebranded to Sports Direct. Turning around the business will not come easy.

Another first was that it was the retailer's first sustainable and green store.

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