Sports Direct takes ‘drastic action' to dismiss House of Fraser management

Retailer Sports Direct has sacked the directors and senior management of struggling department store chain House of Fraser, weeks after buying the company out of administration.

Tycoon Mike Ashley acquired House of Fraser and its 58 UK stores in a £90m rescue deal in August.

Since then, the billionaire owner of Newcastle United and Sports Direct has said he wants the chain to become the ‘Harrods of the high street’, although no details of a turnaround plan have been revealed.

In the weeks following the rescue deal, media reports suggested some landlords of House of Fraser stores had refused to agree on terms that would enable the shops to remain open, with Sports Direct labelling them “greedy”.

In a statement on Monday (October 1) evening, the retailer 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.”

According to Reuters, analysts have suggested Mr Ashley might look to combine House of Fraser with department store business Debenhams, of which Sports Direct owns a 29.7% stake. But the company last month ruled out a takeover.

Commenting on the sackings announced this week, Richard Lim, chief exec of London-based consultancy Retail Economics, said: “Drastic action has been taken following a series of woeful management decisions, clumsy execution and an outdated perception of the UK market.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.”