House of Fraser’s (PRIVATE:HOF) website remained offline on Friday having cancelled all online orders on Thursday due to a dispute with its warehouse operator a week after Mike Ashley’s Sports Direct International PLC (LON:SPD) acquired the collapsed retailer from administrators.
In a tweet on Thursday, House of Fraser revealed that it would refund thousands of online customers potentially millions of pounds, after cancelling orders after a wave of complaints from shoppers who had not received goods bought.
READ: Harrods of the High Street: Ashley's ambition as Sports Direct grabs House of Fraser for £90mln
The department stores group took down its website on Wednesday after its warehouse operator, XPO Logistics, “paused” processing orders because of a dispute over payment.
XPO is among more than 1,000 suppliers to which House of Fraser has written to say it will not cover money owed before last Friday when Mike Ashley’s Sports Direct group bought the department store business out of administration for £90mln.
Due to delays with delivering online orders, we have taken the decision to cancel and refund all orders that have not already been sent to customers. All customers affected will receive an email in the next couple of days. Please accept our apologies for any inconvenience caused.
— House of Fraser (@houseoffraser) 16 August 2018
The logistics firm operates two warehouses, in Wellingborough, Northamptonshire, and Milton Keynes, Buckinghamshire, that handle all House of Fraser’s deliveries to customers as well as to stores.
The Guardian newspapers reported a source close to Sports Direct as saying the group had been forced to cancel orders as XPO was being “totally unreasonable in terms of their demands” and was “refusing to engage in any process” which would “move the situation forward”.
Sports Direct paid £90mln in cash to acquire “all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business" from accountancy firm E&Y acting as administrators.
Sports Direct chief executive Ashley said at the time: “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."