Sports Direct International PLC (LON:SPD) has confirmed it is paying £90mln in cash for collapsed department store chain House of Fraser (PRIVATE:HOF) which earlier this morning appointed accountancy firm E&Y as administrators.
In a brief statement this morning, Mike Ashley's sporting goods and fashion retailer said it has "acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business" as well as James Beattie Limited.
READ: House of Fraser could appoint administrators as soon as Friday following days of talks over a rescue deal: media report
The FTSE 250-listed firm noted that, for the year ended 28 January 2017, the House of Fraser group had gross assets of £946.3mmln and made a £14.7mln net profit.
In a later statement, Sports Direct chief executive Ashley commented: "This is a massive step forward and further enhances our strategy of elevation across the Group. This will benefit both House of Fraser and Flannels in the luxury sector.
“We will do our best to keep as many stores open as possible. It is vital that we restore the right level of ongoing relationships with the luxury brands. Our deal was conservative, consistent and simple. My ambition is to transform House of Fraser into the Harrods of the High Street."
Neil Wilson, chief market analyst at Markets.com commented: "Are we about to see the House of Debenhams? Or maybe it will be renamed the House of Ashley.”
He added: "This would be an exciting development for the retail sector as it could effectively consolidate the two troubled department store chains into a single offering. This appears the only viable solution; combining the operations to reduce overheads and stop competing against each other after a pretty brutal period of sales that has hammered margins."
-- Adds Ashley comment; updates share prices --