Sports Direct owner linked to House of Fraser rescue package

Sports Direct and Newcastle United FC owner Mike Ashley has repoterdly offered to bail out struggling retail chain House of Fraser.

It is claimed bankers for the chain have held talks with Mr Ashley over a possible funding deal.

In June creditors backed HoF’s plans to close more than half its stores, with the loss of up to 6,000 jobs.

Three stores in the North West are to close in Altrincham, Birkenhead and Carlisle. The firm also revealed it is pulling the plug on plans for a store in Chester.

The troubled retailer plans to shut 31 of its 59 shops nationwide and impose big rent cuts on 10 others that it intends to keep through a company voluntary arrangement (CVA), a form of insolvency proceedings, intended to save the company from collapse.

All stores identified for closure are anticipated to trade until early 2019.

However, according to a report by Sky News, Sports Direct has proposed new funding for the business in the form of a loan or an equity injection.

Sports Direct already owns an 11% stake in HoF.

Mr Ashley was interested in acquiring the chain in 2014 when current owners Sanpower took control.

HoF was offered a lifeline in May when C.banner, which owns toyshop Hamleys, offered a £70m investment for a 51% stake in the chain, but this depends on the successful conclusion of the CVA and the store closures.

But the CVA, and consequently the proposed C.banner investment, has been delayed by a legal challenge from a group of landlords seeking to overturn the process.

HoF has declined to comment and Sport Direct has not responded to requests for a comment.

House of Fraser stores earmarked for closure are: 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 Willam Street, Middlesbrough, Milton Keynes, Plymouth, Shrewsbury, Skipton, Swindon, Telford, Wolverhampton, Worcester.