Cut-price sports clothing tycoon Mike Ashley bought one of the established pillars of the UK high street on Friday with a £90 million rescue of the ailing House of Fraser group.
Ashley’s Sports Direct said it had bought all 59 House of Fraser stores after the company was put into administration. Some 17,000 staff have been told they would be transferred to the new owners.
The billionaire, who also owns Premier League football team Newcastle United, said that he planned to transform the 170-year-old department store into the “Harrods of the high street”, in a reference to the luxury store in central London.
House of Fraser was plunged into crisis last week after C.banner, the Chinese owner of toy store Hamleys, pulled its investment in the troubled retail chain.
C.banner was planning to buy a 51% stake in House of Fraser and plough £70 million into the retailer, but then scrapped the move.
The deal sees one of the upstarts of retail take over a traditional store that was struggling as customers switched to the internet to buy clothes, but was burdened with high rents and rising costs.
Ashley made his name from Sports Direct – an aggressive cost cutter that specialises in low-cost sporting equipment and clothing – but has come under fire for its employment practices and poor pay for workers. A report by MPs in 2016 found that an employee had given birth in a toilet because she feared losing her job if she called in sick.
Prior to its collapse, Mr Ashley had held an 11% stake in the department store chain.
The failure of House of Fraser followed the collapse in the UK this year of Toys R Us UK, electricals group Maplin, drinks wholesaler Conviviality and discount retailer Poundworld, which was bought by an Irish retailing family on Thursday.