Sports Direct tycoon Mike Ashley sacks House of Fraser bosses
Mike Ashley has sacked the directors and top management at Beatties owner House of Fraser less than two months after buying the ailing department store chain.
Mr Ashley's Sports Direct company announced the move in a terse statement to the City this morning, saying it followed calls for an investigation into the House of Fraser collapse.
In a one-sentence announcement to the London Stock Exchange, Sports Direct said: "Following the collapse of House of Fraser on August 10 2018, and subsequent calls for an investigation into the circumstances of that collapse, the company today announces that we have dismissed the former directors and senior management of House of Fraser."
The sackings will include House of Fraser chief executive Alex Williamson.
It comes as tracksuit tycoon Mr Ashley, who bought the company out of administration for £90 million, struggles to seal deals with landlords to keep stores open.
After the deal the tycoon said he wanted to turn the 58 House of Fraser stores into the 'Harrods of the high street', but nearly eight weeks later the iconic Beatties department store in Wolverhampton remains in limbo.
Up to 270 people are thought to work at the store and face an uncertain future.
Mr Ashley and his property team are said to be in negotiations with the landlords to try and strike a deal, but Wolverhampton Council has confirmed it has also been in talks with the landlords discussing potential alternative uses for the building if the House of Fraser discussions fall through.
The historic Beatties store had been set for closure early next year under a rescue plan drawn up by House of Fraser's previous owners.
But that plan collapsed and when Mr Ashley bought the business out of administration he scrapped the closures proposals, saying he hoped to keep 80 per cent of the stores open.
But the stores have struggled since then with the loss of many concessions including Jaeger and Jane Norman. As a result, Sports Direct brands have been moved in to fill up empty space at stores.
At Wolverhampton the former greetings card department at Beatties is currently being transformed with Sports Direct branding.
Mr Ashley has been unable to save outlets in Shrewsbury, Edinburgh, Hull, Cirencester and Swindon after landlords refused to agree to new terms, with Mr Ashley labelling them 'greedy'. They are expected to close early in January.
But around 20 have been saved from closure, including House of Fraser’s flagship Oxford Street store and outlets in Telford, Altrincham, Aylesbury, Camberley, Carlisle, Darlington, Doncaster, Grimsby, High Wycombe, Lincoln, Middlesbrough, Plymouth, Skipton, Huddersfield, Leeds, Maidstone, Solihull and Sutton Coldfield.
Richard Lim, of consultancy Retail Economics, said today's dismissal of HoF's top management showed there was a 'momentous challenge at hand'.
He said: "Drastic action has been taken following a series of woeful management decisions, clumsy execution and an outdated perception of the UK market.
"The new management team will need to prioritise right-sizing initiatives and utilise any excess space to sweat assets more effectively in a move become fit-for-purpose in today's digital age."
