Sports Direct hits back over House of Fraser closures speculation

The retailer have threatened The Sunday Telegraph with possible legal action, after it ran a story over the weekend which claimed that owner Mike Ashley was looking to close the struggling House of Fraser department store chain.

According to the story, Ashley is either not paying rent or is about to end House of Fraser leases “for the vast majority” of the remaining sites, including 59 stores, three office buildings and two warehouses, in the new year.

The story also refers to “fresh papers from administrators EY”, which it claimed backed up its story.

However, the Ashley-owned business has hit back strongly at The Sunday Telegraph, saying it is seeking legal advice over the “erroneous misreading” of the documents.

Sports Direct said that the documents in question relate to the old House of Fraser company, and not the new group set up when it acquired HoF out of administration for £90m last year.

The retailer said it had entered into new leases with House of Fraser, and claimed the story had given staff a “false sense of job insecurity”.

The Sports Direct quote in full reads: “The Telegraph article refers to ‘fresh papers from administrators EY’, which is the progress report for the administration of HFL Realisations Limited (formerly House of Fraser Limited, which went into administration in 2018). This refers to a number of leases being surrendered for £nil and a small number of property leases remaining to be dealt with. Please note that the surrenders relate to the leases between the landlord and the old House of Fraser company and have nothing to do with Sports Direct Group including the new House of Fraser group.

“Sports Direct has entered into new leases on the majority of House of Fraser stores. The EY report relates to an entirely different company. Sports Direct continues to work with landlords across the whole of the remaining House of Fraser estate.

“As a result of this erroneous misreading of the administrators report from EY, staff across the HoF group have today woken up to a false sense of job insecurity. Sports Direct is working rapidly on our ongoing investment programme with the HoF brand and it is therefore totally incorrect to assume that there will be large numbers of store closures in the new year. We are taking legal advice with regards to this unbelievable level of misreporting.”