LONDON, United Kingdom — Sports Direct International Plc says it will continue to operate most of House of Fraser Ltd.’s 59 UK and Ireland department stores after acquiring the chain for £90 million ($115 million).
“Our aim is to keep at least 80 percent of the stores open,” Liam Rowley, Sports Direct’s head of strategic investments, said in an interview on Bloomberg TV. “We feel that we can bring a lot more to the table with our ambition than, maybe, was previously done.”
Sports Direct rescued House of Fraser from near collapse last week after would-be Chinese buyer C.banner International Holdings Ltd. pulled out, prompting the UK company to begin insolvency procedures. C.banner had planned to shut more than half of the chain’s department stores.
House of Fraser is the latest near-victim of a crisis that has claimed retailers like BHS, Maplin Electronics and the UK arm of Toys “R” Us Inc. British shopkeepers are struggling with a Brexit-fueled spike in sourcing costs, increased staffing outlays and a squeeze on disposable incomes. The steady rise of e-commerce has also opened up bricks-and-mortar stores to new competitors with low overheads.
After buying House of Fraser, Sports Direct chief executive Mike Ashley said he wanted to turn the chain into the “Harrods of the high street,” referring to the upmarket London retailer. The sporting-goods seller also holds a stake in Debenhams Plc, another beleaguered British department-store chain.
“The luxury market is on fire at the moment,” Rowley said. “We need to bring in brands that people want. If you get the right gear in the store, people will come to the store.”
By Lucca de Paoli; Editors: Eric Pfanner, John Lauerman.