It’s been a frantic few days on the UK High St…
After Chinese owners C.banner walked away from a £70m deal to save House of Fraser, it was touted that HoF had just 10 days of trading left last Thursday. This news was swiftly followed by administrators EY had being called in on Friday morning, and then within minutes it emerged that 11% stakeholder Mike Ashley would purchase the company in a £90m cash deal. (catch breath)
In the days that have passed, news of future plans for the department store chain are starting to emerge and it seems that Mr Ashley has big plans which may well include his current portfolio of retail assets.
Sports Direct are currently in talks with property landlords and plan to keep “at least 80%” of HoF stores open. Some of these stores are to be re-branded under the Sports Direct and Flannels name whilst the other may include a possible amalgamation with Debenhams, of which Mr Ashley already owns a 30% stake.
Since the takeover of HoF, Sports Direct shares have fallen over 2%, yet shares in Debenhams have at one point being traded up 27% amidst the speculation.
Elsewhere on the High St, news has emerged that Homebase are to close 42 stores placing upto 1,500 jobs at risk. This is the fifth High St chain to close stores this year including M&S, New Look, Mothercare and Carpetright, as well as BHS, Maplins and Toys “R” Us who have closed their doors completely.
Some of the problems being cited are increasing labour costs, property taxes and online competition, all of which leading to a 1.2% fall in retail spending according to Visa. Whilst it may be too late for the aforementioned retailers, reports of a possible new ‘online retail tax’ will be of some light at the end of the tunnel for those trying to compete with the likes of Amazon who saw their tax bill almost halve despite their profits nearly trebling.
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