House of Fraser’s unlikely saviour revealed

Mike Ashley, the owner of Shirebrook-based Sports Direct, could be the unlikely saviour of House of Fraser, according to reports.

Sky News says that House of Fraser advisers are in talks with Ashley over a £50m rescue deal for the stricken department store, with Ashley making the first move.

Ashley made his play at the beginning of July when it became apparent that a cash injection of £70m from the Chinese owner of Hamleys wouldn’t materialise for several months – time House of Fraser doesn’t have.

Sports Direct already owns 11% of House of Fraser. In a letter seen by Sky News, the company said it could help House of Fraser with “warehousing, online sales and the running of the business generally”.

In June, creditors backed House of Fraser’s plans to close more than half its stores.

The troubled retailer is planning 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.

It came up with the rescue package in May, aimed at saving the company from collapse.

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

Up to 6,000 jobs will go as a result of the store closures.