- Huw Hughes |
House of Fraser has extended its administration for another year as Mike Ashley presses forward with his turnaround plan for the struggling retailer.
The administration of the company was due to end on 10 August, but has now been extended to the same date in 2020 by consent of the company’s creditors.
Last year, Mike Ashley’s Sports Direct bought House of Fraser out of administration for 90 million pounds, with an optimistic Ashley vowing to transform the embattled department store chain into the "Harrods of the high street."
Since then, however, the company has changed its tune, admitting that the retailer was in worse condition than Sports Direct had expected when it made the acquisition. For the year to April, it had made a loss of 54 million pounds.
In its annual report, Sports Direct said: “On a scale out of five, with one being very bad and five being very good, House of Fraser is a one, albeit we are trying very hard to turn the business around this will not be quick and it will not be easy.
“Even though we do believe there could be a bright future for House of Fraser, and indeed have publicised our Frasers vision which we are very excited about, if we had the gift of hindsight we might have made a different decision in August 2018.”
Due to the uncertainty surrounding House of Fraser’s future, Sports Direct said it wouldn’t be giving a consensus to the market for its FY20 performance. “We will review the current situation again at the half year and depending on factors mentioned above being resolved to a suitable extent we may be able to give guidance at that point,” the company said.
Earlier this month, an anonymous person in regular contact with Ashley told The Financial Times the Sports Direct boss could close as many as two-thirds of the original 59 House of Fraser stores.
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