Deliveries dry up again for House of Fraser

Hopes earlier this week that a deal had been struck, and that deliveries would restart, appear to have been dashed. It is understood some deliveries had got through to stores earlier this week but have now dried up again.

House of Fraser's distribution centres are run by a company called XPO Logistics which has been at loggerheads with tracksuit tycoon Mr Ashley since he bought the department store chain out of administration for £90 million a three weeks ago.

The terms of the administration means Mr Ashley and his Sports Direct business are not responsible for any bills racked up by House of Fraser before he bought the business on August 10 but XPO is owned more than £30 million and the two sides have been unable to agree on delivery terms.

HoF took its website offline on August 15 as a result of its dispute with XPO, which had stopped accepting goods and processing deliveries for House of Fraser. The following day the store chain contacted customers to say it had cancelled all orders that had not already been sent out.

House of Fraser's chief executive Alex Williamson had said the distribution centres were expected to start accepting and dispatching deliveries from August 24. But they now appear to have stopped again.

Alan Costello, organiser at the GMB union that represents many of the XPO workers, said: "As far as we are aware, no agreement has been reached and both depots remain non-operational.

“Our members are turning up for work at the sites and being stood down each day.

“We call on XPO and Sports Direct to get round the table and come to an agreement which will stop 627 people facing redundancy.

“This isn’t just a game of profits - this is our members’ livelihoods on the line.”

Neither Sports Direct nor XPO have commented on the reports.

The House of Fraser website is still down 'for maintenance' and directs shoppers to Flannels, the upmarket store chain also owned by Sports Direct.

Meanwhile Mr Ashley, senior bosses from Sports Direct and a team from property agency CBRE are currently negotiating with landlords up and down the country seeking to strike deals that will allow House of Fraser stores to remain open.

That includes the owners of the Beatties building in Wolverhampton, sold by House of Fraser chain for £47 million in 2005, shortly after they bought it. It is understood to have passed through the hands of several owners since then.

So far Mr Ashley has successfully struck deals to keep seven of the 59 stores open, some way short of his target of around 47. That includes the flagship store in London's Oxford Street and branches in Telford, Carlisle, Darlington, Middlesborough, Plymouth, and Aylesbury.

But around 279 working at the Beatties store are still waiting to discover their fate, along with hundreds more at branches in Shrewsbury and Birmingham.

Mr Ashley warned this week that 'greedy' landlords could frustrate his plans, saying "time is running out" for the remainder of the department store estate.

A spokesman for House of Fraser said: "Some landlords are being very collaborative in order to give us a chance at turning the business around, giving House of Fraser a lifeline and saving hundreds of jobs.

"However, some greedy landlords would rather see the stores close than help save the jobs of hundreds of people.

"We will continue to try and convince these landlords but ultimately time is running out. Some closures will be announced."

It is understood that landlords are reluctant to agree to the low rents Mr Ashley is demanding.

Following the deal to save the Oxford Street store Mr Ashley said: "It is a massive step forward and further enhances our strategy of elevation across the group.

"My ambition is to transform House of Fraser into the Harrods of the high street.

"We will do our best to keep as many stores open as possible."