The store was due to close in January under the House of Fraser CVA that was announced in June 2018 before the company entered administration.
However Mike Ashley’s company Sports Direct agreed to acquire the struggling retailer in a £90m deal just minutes after it was announced it had entered administration. Now CBRE, which has been appointed as advisers to Sports Direct, has agreed a deal to see the flagship store stay open and continue to be “fully operational”.
James Keany, head of national agency at CBRE who acted on the negotiations, said: “This deal only happened because all parties realised it was better to keep the store open and fully operational. It was a real case of landlord and tenant genuinely working together and at great speed. Everyone was sensible about the terms of the transaction”.
It is first deal to be agreed on a House of Fraser store, transacted in just over a week since Sports Direct acquired the business.
Michael Murray head of elevation at Sports Direct, added: “We said we would keep as many stores open as possible, and in less than a week we have saved the biggest store. Oxford street was meant to close in January and now it’s safe which is great news for all parties. Everyone must remember it was a bust business and we need Landlords, Councils and Brands to pull together to save House of Fraser on the high street.”
However the news comes as GMB, the union for logistics workers, slammed Mike Ashley after 627 jobs were placed at risk at XPO logistics, a supply chain partner of House of Fraser. Members of staff were put on a 45-day consultation period from 17 August.
The department store’s logistics contractor XPO is reportedly owed £30.4m, while House of Fraser’s wider debts are believed to be valued at £1bn. Sports Direct is not obliged to pay these debts owed to House of Fraser creditors at the time of its collapse, however if the debt is not paid then the members of staff could lose their jobs.
Alan Costello, GMB organiser, said: “This is a massive blow to our members based at depots in Wellingbrough and Milton Keynes who have been left in limbo. When companies like House of Fraser crash, history shows that asset stripping is often the consequence.
“You’ve got to question the motives for this buyout and ask whether Mr Ashley has got the interests of the company and its workers at heart. There are more than 600 people desperately worrying about their futures and how they’re going to be able to put food on the table for their families.”
He added: “It’s time for Mike Ashley to show that his rescue plan for House of Fraser is not simply a plan to boost his bank balance at the expense of House of Fraser workers and our members. GMB will be fighting hard to ensure members are treated fairly and to save as many jobs as possible.”