House of Fraser falls into administration

House of Fraser administration

House of Fraser administration

British department store House of Fraser will seek the appointment of administrators today after negotiations with its investors and creditors failed to conclude in a "solvent solution".

Mike Ashley, the founder of Sports Direct, is said to be close to striking a deal to buy the chain out of administration, Sky News reports. The administration is due to be arranged at a court hearing early on Friday morning.

Half its stores, including Beatties in Wolverhampton, Rackhams in Birmingham and those in Telford and Shrewsbury face closure under a previous rescue plan but not until after Christmas.

The chain, which has 59 stores nationwide, will continue trading while EY looks to complete a sale. Stores were delaying opening until 11am, however.

House of Fraser told the Luxembourg stock exchange that "discussions continue" with potential investors.

A statement from Alun Hudson said: "We have worked very closely with management, its advisors and creditors in recent weeks and are pleased that we have been able to successfully conclude a sale of the business in short timescales which preserves as numerous jobs of House of Frasers employees as possible".

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

House of Fraser chairman Frank Slevin said: "This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan".

Thousands of anxious shopworkers at House of Fraser stores and its concessions are now waiting to discover their fate.

The accelerating pace of the crisis was made plain on Thursday when the beleaguered department store chain revealed that it had to secure funding before August 20 as crunch talks with potential rescuers continued.