House of Fraser appoints administrators

The troubled department store needs new funding by no later than next week

Mike Ashley has said his ambition for House of Fraser is to transform the beleaguer department store into the "Harrods of the high street" pledging to "keep as many stores open as possible". Even within a struggling industry, the likes of House of Fraser look like relics of the Edwardian era, about as relevant to the 21st century as typewriters and video players.

In an announcement on the Luxembourg Stock Exchange earlier this morning, where its bonds are listed, House of Fraser had said "discussions with interested investors and its main secured creditors have not concluded in a solvent solution".

In a stock market announcement, Sports Direct said it has acquired all of the United Kingdom stores of House of Fraser, the brand and all of the stock in the business.

Sports Direct boss Mike Ashley has reportedly agreed to pay £90million for the chain - which includes an Aylesbury Friars Square Shopping Centre store which was already scheduled for closure.

House of Fraser employs about 6,000 people directly and 11,500 concession staff.

The retailer, which has appointed Ernst & Young as administrator, said: "Significant progress has been made towards completing a sale of the group's business and assets".

Today, all of the existing 59 stores will remain open, including the 31 previously earmarked for closure - one of which is the flagship store on London's Oxford Street.

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Potentially nodding to Mike Ashley's rumoured interest, House of Fraser chief executive Alex Williamson had said: "We are hopeful that the current negotiations will shortly be concluded".

It is understood that Mr Day's proposal was in excess of £100 million, would have avoided an administration and included House of Fraser's pension scheme.

"An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength".

Sources said that Mr Ashley will now begin the process of turning some House of Fraser stores into Sports Direct outlets and rebrand others under the Flannels fascia.

"Despite the very recent termination of the transaction between Cenbest and C.banner, I am confident House of Fraser is close to securing its future".

The rescue plan was derailed when Chinese group C.banner, owner of Hamleys toy shop, pulled out of a deal to buy a 51 per cent stake in House of Fraser and inject £70 million of crucial new capital.

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