Mike Ashley’s Sports Direct confirms House of Fraser acquisition | City A.M.

Mike Ashley’s Sports Direct has bought House of Fraser for £90m.

The acquisition includes all the UK stores, the brand and all the stock.

It comes after the department store chain announced this morning that it is to appoint administrators after it failed to find a solvent solution.

The price represents a heavy discount for the once-mighty department store.

In the year to 28 January 2017, House of Fraser had assets worth almost £950m. It was bought by Chinese company Sanpower four years ago in a deal that valued the business at £450m.

City A.M. understands that retail billionaire Philip Day, the owner of Edinburgh Woollen Mill, had joined forces with a group of suppliers for an alternative offer for the chain which would have paid £100m.

Ashley’s Sports Direct already had an 11 per cent stake in House of Fraser. The acquisition of the chain could fulfil a long-stated ambition to make Sports Direct the “Selfridges of sport”.

Retail observers have even previously suggested that Ashley could merge House of Fraser with Debenhams, in which he holds a stake of just under 30 per cent.

Shares in Debenhams jumped more than three per cent this morning as news of House of Fraser’s insolvency emerged.

“This would be an exciting development for the retail sector as it could effectively consolidate the two troubled department store chains into a single offering,” said Neil Wilson of Markets.com about the prospect of a combination.

“This appears the only viable solution; combining the operations to reduce overheads and stop competing against each other after a pretty brutal period of sales that has hammered margins.”

But after Sports Direct took a profit hit from its stake in Debenhams this year, such a move could face some investor opposition.

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