House of Fraser units in administration, inks £90 million sale deal

By Caroline Salls

Pittsburgh, Aug. 10 – House of Fraser announced Friday that the directors of group operating companies House of Fraser (Stores) Ltd., House of Fraser Ltd. and James Beattie Ltd. have decided to seek the appointment of administrators in light of the fact that discussions with interested investors and the company’s main secured creditors have not resulted in a solvent solution.

House of Fraser said hearings were expected to take place Friday to seek approval to appoint Ernst & Young LLP as administrator of the operating companies.

According to the news release, significant progress has been made toward completing a sale of the group’s business and assets. The company said the proposed administrators are expected to continue the sale discussions with a view to completing a transaction shortly after their appointment.

In a separate release, Sports Direct International plc said it has acquired the business and assets of House of Fraser from the administrators of House of Fraser Ltd., House of Fraser (Stores) and James Beattie for a cash consideration of £90 million.

Under the transaction, Sports Direct said it has acquired all of House of Fraser’s U.K. stores, the House of Fraser brand and all of the stock in the business.

The proposed administrators have confirmed that the business will continue trading, including all stores and offices, while they seek to complete a sale, House of Fraser said.

The company said an acquisition of the 169-year-old retail business will allow it to regain stability, certainty and financial strength.

“In the two weeks since the Cenbest and C.Banner transaction ceased, the directors have brought forward a number of potential buyers, and the group’s financial advisers have run a comprehensive M&A process to identify and then develop other third-party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace,” chief executive officer Alex Williamson said in the release.

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. 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.”

House of Fraser is a London-based department store company.

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