Published: 07:56, 10 August 2018
| Updated: 11:00, 10 August 2018
Department store giant and high street staple House of Fraser has been rescued hours after it announced its intention to call in administrators.
Sports Direct, owned by the controversial entrepreneur Mike Ashley, has struck a deal to buy all its stores, the brand and all its stock for £90 million.
The struggling brand announced this morning it planned to go into administration after last-ditch talks with investors and creditors failed.
The 169-year-old company has two stores in Kent at Bluewater and in Maidstone's Fremlin Walk.
The move into administration had put 17,500 jobs at risk nationally.
The takeover by Sports Direct is a relief to staff at the chain's Kent stores, which were briefly put at risk having been due to be spared the axe under its previous rescue plans.
Bosses had hoped to close 31 of its 59 stores under a company voluntary agreement, a controversial insolvency process which allows struggling businesses to close unprofitable sites and cut rents.
As part of a deal, Chinese retailer C.banner would have taken a 51% share in the firm.
Yet many of House of Fraser's creditors objected to the plan. It would have needed the support of 75% of them.
Newcastle United owner Mike Ashley has long been rumoured to have been interested in buying the department store giant - as well as Philip Day, chief executive of Edinburgh Woollen Mill.
In an announcement on the Luxembourg Stock Exchange earlier this morning, where its bonds are listed, House of Fraser had said "discussions with interested investors and its main secured creditors have not concluded in a solvent solution".
It added that Ernst & Young LLP will be appointed as administrators.
The announcement continued: "Significant progress has been made towards completing a sale of the group’s business and assets.
"The proposed administrators are expected to continue to progress those discussions with a view to concluding a transaction shortly after their appointment."
Potentially nodding to Mike Ashley's rumoured interest, House of Fraser chief executive Alex Williamson had said: “We are hopeful that the current negotiations will shortly be concluded.
"An acquisition of the 169-year-old retail business will see House of Fraser 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 advisors have run a comprehensive merger and acquisition 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.”
The company's chairman Frank Slevin added: “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.”