House of Fraser bought by Sports Direct but future of Leamington store is unclear
Department store chain House of Fraser has today been bought by retail company Sports Direct for Â£90 million after it had fallen into administration.
The Leamington branch of the ailing company is one of 31 of its 59 stores earmarked for closure under the previous owners.
But Sports Direct, owned by Mike Ashley, has now "saved " the company raising hopes for the future of thousands of staff.
Some 17,000 staff are being informed that they will be transferred over from House of Fraser to Sports Direct.
But whether this means that the Leamington branch will now remain open has not yet been confirmed.
The store chain had earlier announced its fall into administration, but insisted that “significant process has been made” in finding an owner.
Mr Ashley beat off competition from retail rival Philip Day, the billionaire owner of Edinburgh Woollen Mill.
It is understood that Mr Day’s proposal was in excess of £100 million, would have avoided an administration and included House of Fraser’s pension scheme.
However, accountancy giant EY, which was overseeing the process, opted for Mr Ashley’s offer.
Sources have said that Mr Ashley will now begin the process of turning some House of Fraser stores into Sports Direct outlets and rebrand others under the Flannels fascia.
Prior to its collapse, Mr Ashley had held an 11 per cent stake in the department store chain.
House of Fraser, meanwhile, assured that its offices and stores will continue operating while they attempt to reach a deal.
Following the revelation that the chain had entered administration chief executive Alex Williamson said: “We are hopeful that the current negotiations will shortly be concluded.
“An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength.”
Frank Slevin, chairman of House of Fraser, said: “This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan.
In light of the eventful morning of news surrounding the future of House of Fraser, the leader of Warwick District Council Councillor Andrew Mobbs is continuing to pledge the auhtority's offer of support and reassurance to the Leamington store’s 200 employees
Cllr Mobbs said: "“The House of Fraser store on the Parade has again been offered our support and, along with our partners, we will provide assistance in any way that is helpful during this time. We will await further news over the coming weeks and months to see how the sale of House of Fraser to Mike Ashley will specifically impact upon the Royal Leamington Spa store.
"We are hopeful that this may secure the long-term future of the employees and the historic brand.
"I would also like to take this opportunity to remind other local businesses that there are a range of support services for them available locally. For further information, please email [email protected].”