Billionaire Mike Ashley bought House of Fraser today for £ 90 million – 82 minutes after he sank into management putting 17,000 jobs at risk.
The tormented chain of department stores needed a cash injection before August 20 and is closing 31 stores, including its subsidiary Oxford Street.
Today, Mr. Ashley, who already owned 11 percent of the business, bought the remaining 28 stores, all the shares and the brand for £ 90 million.
Some 17,000 workers are being informed today that they will be transferred from House of Fraser to Sports Direct, a business where some employees compared the payment and conditions with a Victorian nursing home or a Siberian gulag.
The House of Fraser website is offline today, but the company says it is complying with all online orders, as well as returns and coupons in its stores, for now.
The EY administrators intervened today at 8.34 a.m. and Ashley's agreement to buy it was announced at 9:56 a.m. M.
The founder of Sports Direct, which previously said he dreamed of owning a department store in the UK, faced a rival offer from Philip Day, the billionaire owner of Edinburgh Woolen Mill.
When House of Fraser was overthrown in the administration today, it ended with 169 years of trouble-free operations for the retailer.
House of Fraser has entered the administration today putting at risk 17,000 jobs and 31 stores face closure
Mike Ashley waited behind the scenes and overcame a challenge from the Edinburgh Wool Mill billionaire, Philip Day, to buy the department stores.
The 90 million pound deal gives Ashley the remaining 28 stores, all of her shares and the brand, and some staff members could now join Sports Direct.
Timeline: financial crisis of the House of Fraser
2014: The Sanpower group, owned by Chinese industrialist Yuan Yafei, buys House of Fraser. The new owner announces big plans to grow the business and expand to China by investing £ 75 million in the business.
2015: House of Fraser publishes its fifth consecutive year of legal losses as the group suffers heavy fees related to its refinancing of £ 300 million, which it had used to finance the refurbishment of the store and improve its purchase and collection service.
2016: In spite of the great plans of expansion of Sanpower, in December of this year only one store was opened in the Chinese city of Nanjing.
September 2017: House of Fraser receives its first cash injection from its Chinese owner, who finally takes 25 million pounds sterling.
May 2017: Chief Executive Alex Williamson is appointed. Launches an effort to restructure the range of products and stores of House of Fraser and reduce costs. He says he wants to reduce property costs by 30 percent within five to ten years.
January 2018: The struggling departmental store says it will close stores that fail or reduce the size of others after registering disappointing Christmas sales.
March 2018: Sanpower announces plans to download 51 percent of its 89 percent stake to a mysterious Chinese entertainment company called Wuji Wenhua. Meanwhile, another suitor appears: the Chinese company Fullshare, controlled by billionaire Ji Changqun. However, the company issues a profit warning a fortnight before the agreement is expected to be finalized.
April 2018: The accounting giant KPMG is called to study possible restructuring plans.
May 2018: The firm draws up proposals for a voluntary agreement of the company, an insolvency process that could close up to 30 of its 59 stores and negotiate drastic cuts in the rent of others. That is the condition for accessing the £ 70 million funds pledged by a second Chinese firm, C.banner, owner of the Hamleys toy store in London. Hamleys' Chinese owner, C.banner, has conditioned access to the funds to a restructuring agreement.
June 7, 2018: The department stores continue with the CVA, which will result in the closure of 31 of its 59 stores throughout the United Kingdom and Ireland.
August 9, 2018: The chain announces that it has only days to find new funds after C.banner withdraws.
August 10, 2018: It collapses in administration, but is bought by Mike Ashley less than 90 minutes later
Labor affairs secretary Rebecca Long-Bailey said staff at House of Fraser would be concerned about the implications of the sale for Sports Direct.
"Some of the major retailers on the main streets of Britain are being replaced by huge holes," he said.
"It is unforgivable that conservatives have done nothing while tens of thousands of jobs have been put at risk.
"His inaction has paved the way for people like Mike Ashley, notorious for his company's precarious treatment of workers, for aspiring companies, and the staff will undoubtedly be concerned about what the sale of their wages and conditions means.
"How many more of our most recognized street brands will have to pass before the prime minister intensifies and addresses the system of broken business rates that is turning our main streets into ghost towns?"
In a stock exchange ad, Sports Direct said it had acquired all UK stores from House of Fraser, the brand and all of the company's stock.
The agreement was reached through a pre-package management process, in which a company enters the administration before a new buyer chooses the best assets.
The tycoon beat the competition of his retail rival Philip Day, the billionaire owner of Edinburgh Woolen Mill.
It is understood that Mr. Day's proposal was over £ 100 million, would have avoided an administration and included the House of Fraser pension plan.
However, the accounting giant EY, who was overseeing the process, opted for Ashley's offer.
The sources said that Mr. Ashley will now begin the process of converting some House of Fraser stores into Sports Direct outlets and changing the names of other people in the Flannels strip.
Before its collapse, Mr. Ashley had an 11% stake in the department store chain.
The agreement will cause the owner of Newcastle United to tighten its control over British main street, adding to its retail sales of sports and the empire of the 'top fashion'.
The billionaire has also accumulated holdings in rivals such as Debenhams, Goals Soccer Centers and French Connection.
House of Fraser joined the administration today and was plunged into a new crisis after C.banner, the Chinese owner of Hamleys, invested his investment in the troubled retail chain.
C.banner planned to buy a 51 percent stake in House of Fraser and plow £ 70 million into the troubled retailer, but canceled the measure last week.
House of Fraser websites crashed today, but the company says it is complying with existing orders
House of Fraser President Frank Slevin said today: "This has been an extraordinary six-month challenge in which the company has delivered so many critical elements of the restructuring plan.
Fans and former Newcastle players were stunned by the purchase of Mike Ashley's House of Fraser and asked: & # 39; What position do you play? & # 39;
After a quiet transfer window, fans of Mike Ashley at Newcastle United joked that House of Fraser was a new player.
Record goalscorer Alan Shearer posted a link on the company news and said: "What position do you play?"
Ashley previously promised manager Rafael Benítez & # 39; every penny generated & # 39; by the club to spend on transfers, but the Magpies finished the window with an estimated net profit of more than £ 15 million.
His most expensive signing this summer was Yoshinori Muto of the German team FSV Mainz 05 for an estimated £ 9.5million.
And the last time the Toon army broke their transfer record was 13 years ago when Michael Owen signed with Real Madrid for £ 16.5 million.
In response to the news of the purchase of House of Fraser, Shearer's former teammate at Newcastle, Steve Howey, tweeted: "After my rant yesterday at the BBC about where the money went and nobody has been able to answer .. Now we know it. "
A Newcastle fan tweeted: "Mike Ashley bought a crumbling retailer for £ 90 million amid protests over where our 100 million in TV money promised to Rafa has gone, the day after the transfer window closes , says it all".
Another supporter said: "What agreement on the transfer day took longer to complete? Raphael van der Vaart to the Spurs or House of Fraser to Newcastle? That will be a pub quiz question."
"Despite the very recent termination of the transaction between Cenbest and C.Banner, I am confident that House of Fraser is close to securing its future."
Alex Williamson, executive director of House of Fraser, said: "We hope that the current negotiations will be concluded soon.
"An acquisition of the 169-year retail business will see that House of Fraser will regain stability, certainty and financial strength.
"In the two weeks since the Cenbest and C.Banner transactions ceased, the directors have presented a series of potential buyers and the group's financial advisors have carried out a comprehensive mergers and acquisitions process to identify and then develop other interests from third parties that culminated in secured senior creditors leading the negotiations with the parties at a critical pace. "
Lenders at Fraser House, which includes HSBC, are now in talks with potential suitors, such as the scam mogul Mike Ashley and Philip Day, the billionaire owner of Edinburgh Woolen Mill.
The couple is presenting proposals to rescue House of Fraser this week.
It is understood that the group of loans is not taking seriously an offer from the retail restructuring specialist Alteri, which was also in the process of being executed.
Prior to the latest crisis, House of Fraser had recently agreed to a so-called Voluntary Enterprise Agreement (CVA) with owners to close half of the stores, with 6,000 jobs in the line of fire.
According to the rescue plan, the flagship store of the Oxford Street chain would have closed along with 30 others, including Birmingham and Edinburgh.
The company, brought by the Chinese firm Sanpower for £ 480 million in 2014, would not have stores open in Wales stores as the Cardiff and Cwmbran branches were ready for closure.
The difficulties of department stores are the latest big-name blow on British main street, which is facing a crisis as chains increasingly close stores to focus on online sales.
The retail sector is Britain's largest employer, with 4.6 million working in the industry.
But in recent years, as shoppers move to the Internet, jobs are increasingly put at risk with brands like New Look and Marks and Spencer announcing store closings this year and Maplin and Toys R Us closing by full.
The main store of the House of Fraser in Oxford Street (in the photo) was one of those that were closed
House of Fraser was founded by Hugh Fraser and James Arthur in Glasgow in 1849 as a curtain shop called Arthur and Fraser. It took its current name in 1941.
In 1985 it was bought by the Fayed brothers, the owners of Harrods, for 615 million pounds sterling, which floated the company on the London stock exchange. An important remodeling of the departmental store began.
The chain was launched online in 2007 and opened its first international store in 2013 in Abu Dhabi.
The current owner of House of Fraser, the Chinese conglomerate Sanpower Group, bought 89 percent of the department stores in September 2014 for £ 480 million.
After last year's disappointing Christmas sales, he announced that he would close the stores that failed and reduce the size of others, beginning the last chain of financial rescue efforts.
High Street decline: retailers struggling to stay afloat as online rivals lead their customers
Toys R Us: The toy chain entered administration on the last day of February after being unable to find an external buyer. In February, HMRC sought to recover £ 15 million in unpaid VAT and this eventually led the company to the administration.
Maplin: One of the largest electronics retailers in the United Kingdom collapsed in the administration on the same day as Toys R Us after talks with buyers failed to secure a sale. The business faced the fall in the pound after the Brexit vote, weak consumer confidence and the withdrawal of credit insurance.
Conviviality Retailing: The main beverage supplier and outside license owner of Wine Rack and Bargain Booze entered the administration at the beginning of April. The company had grown too fast by merger, there was a series of profit warnings and a £ 30 million tax bill for which Conviviality was forced to request additional funds from investors, who refused.
Warren Evans: Retailers of beds, mattresses and furniture in London and the southeast entered the administration a week after they went on sale. The retailer, known for its ethical stance, had been losing money for some time under the pressure of increasing costs and reducing customer spending.
Calvetron: The owner of the fashion brands Jacques Vert, Windsmoor, Dash and Eastex, which managed around 300 concessions in the UK in stores such as Debenhams and House of Fraser, went into administration in early May. The bosses said that inflation and the wage freeze had been a driving force behind the decline in spending.
Juice Corporation: The signature behind the fashion brand Joe Bloggs and the retailer that designed the wedding dress for Diana, Princess of Wales, collapsed in the administration in January. Although the group made profits, it did not manage to enter the fashion market.
Mothercare: The maternity and baby goods retailer has proposed closing 50 stores as part of a planned change for the company. He said the losses were driven by the costs of 17 store closures last year, onerous leases and a restructuring of the central office that resulted in 190 job cuts.
Carpetright: The conflicting flooring company is embarking on a store closure program and has begun raising £ 60 million in emergency funds as it pushes through a restructuring after announcing that it hoped to reserve an underlying year-round loss of between £ 7 million and £ 9 million.
Carluccio: The luxury deli chain unveiled a restructuring plan that will likely lead to 34 restaurant closures, citing a combination of a gradual decrease in consumer spending and increased competition, along with rising costs at hand of work, raw materials, rentals and business.
Other restaurants that have made voluntary agreements with the company so far this year include Byron, Prezzo and Jamie & # 39; s Italian.
New style: The clothing chain announced earlier this year that it would close 60 stores in the UK and cut 1,000 jobs as part of a financial restructuring.
The billionaire pint drinker nicknamed King Chav of High Street whose Sports Direct empire began with a unique sports shop and a £ 10,000 loan
Close: Mike Ashley and his ex-wife Linda have rekindled their relationship 12 years after their divorce
Former squash coach Mike Ashley began his business career at a Maidenhead sports store and became one of the richest men in Britain.
No doubt, he is a ruthless and successful businessman, but often seems more comfortable with a pint in his hand in football than in a business suit and is a confessed "power drinker".
An extraordinary court case last year heard that Mr. Ashley threw up in a pub fireplace at a company meeting after consuming 12 pints of beer during a drinking competition with a colleague, according to a court.
The owner of Newcastle United allegedly held senior management meetings that became "closures in bars" involving the flow of alcohol, kebabs and drinking games, a judge said.
He also lied under the tables and "takes a nap" at meetings that he found boring, he alleged.
Billionaire Mr. Ashley is of humble origin and has developed a reputation for frugality.
Even when he was on his way to winning millions, he preferred to drive in a crushed Vauxhall Cavalier while his glamorous Swedish wife Linda had an Aston Martin DB4.
But this did not last forever because Mr. Ashley changed it to a new Ford Sierra a few years later.
The 33-room mansion with columns of Mr. Ashley in Beverly Hills of London in Barnet has an extensive route, four garages and it is said that his close neighbors include Arsene Wenger and several members of One Direction.
He is a world away from when he started Sports Direct 34 years ago with a £ 10,000 loan from his parents.
He built it from a single store in Maidenhead, Berkshire, to become one of the nation's most successful retailers and has a 55 percent stake in the company, currently valued at around £ 1.4 billion.
It does not matter that most of the tracksuits and training shoes he sells are worn by non-sports couch potatoes instead of gymnastics bunnies, or that the rough diamond businessman has been nicknamed King Chav of High Street.
Undoubtedly, he is a ruthless and successful businessman, but Mr. Ashley, who left in a Newcastle match, has been more comfortable with a pint in his hand in football than in a business suit.
The assets of the Sports Direct trophy include the prestigious sportswear empire Lillywhites at Piccadilly Circus, and world-famous brands such as Dunlop, Everlast and Slazenger.
Along the way, Mr. Ashley has been persecuted with controversy, particularly for alleged "Dickensian" working conditions. at the company's flagship store in Shirebrook, Nottinghamshire.
Management meetings are held frequently at the nearby Lion Hotel, and can last until 3 a. M. The top executives of Sports Direct live locally in a group of houses with a value of around £ 400,000 each.
However, there is a limit to his frugality: Mr. Ashley has a helicopter to fly between his mansion and the office. He also bought Newcastle United, but many fans are not interested in him. For a time, he could not take his family to the parties for fear of abuse.
He said at the time: "I am a father who can not take his children to a football game on a Saturday because they warn me that they will attack us."
For most of the work week, it is located at the company's nerve center in Shirebrook.
The billionaire does not even have his own office, but he has an audience at a desk in the middle of an open-plan office, where he sits until around 2 am in a few days.
A gardener who works in another house next to Mr. Ashley's Barnett house said he sees the billionaire's helicopter fly almost every Wednesday.
His 50-year-old ex-wife, Linda, who looks like his Swedish compatriot Britt Ekland, came down Whitehall in a white dress, sunglasses and heels to support the low-profile businessman when he faced the MPs in June. year.
And after a break of 12 years it was also the confirmation that they were together again, but despite the rekindled romance, MailOnline understands that they still live in separate mansions just a mile away.
After her divorce interior designer, Mrs. Ashley, mother of the billionaire's three children, had a relationship with businessman Simon Brodin, ex-boyfriend of the S 7 star Rachel Stevens, and had a son, Tyler. , now 12, by him.
But in 2014 Mrs. and Mrs. Ashley were seen entering their Bentley after a series of dates in central London, including a key dinner at a local curry house.
The famous billionaire just gave an interview for a decade and never comments on his private life, but his friends have previously said he could propose to his ex-wife again and that he had even lost weight after finding happiness with her again.
While working hard in Shirebrook, his adult children Ollie, 25, Anna, 24, and Matilda, 19 and ex-wife, enjoy a more extravagant existence.
While it is known that her father avoids expensive costumes for her scruffy jeans, her T-shirts are just as glamorous as her mother's. Blond sisters have a good looking model and closets to match.
In a behavior similar to that of the daughters of another business tycoon / swashbuckling athlete – Bernie Ecclestone of Formula 1 – the profiles of Matilda's social networks are full of glamorous selfies.
Linda Ashley has been seen at society events and is an interior designer.