viewFrasers Group PLC

Sports Direct bemoans “false sense of job insecurity” for HoF workers

The retailer said it is “totally incorrect to assume that there will be large numbers of [House of Fraser] store closures in the new year”

Sports Direct International Plc -
Mike Ashley has said he wants to turn HoF into “the Harrods of the high street”

Mike Ashley says workers at Sports Direct International Plc’s (LON:SPD) House of Fraser department store chain have “woken up to a false sense of job insecurity” after reports about the company’s property leases.

The retail group said it was taking legal advice on the matter after a report in the Sunday Telegraph that a number of HoF leases had been surrendered for free.

This was “erroneous”, Sports Direct said, as the leaked documents relate to leases between landlords and “the old House of Fraser company” and are “nothing to do with” Sports Direct and its current HoF subsidiary.

Seven closures?

Seven of the 59 HoF stores are empty, with Sports Direct either not paying rent or preparing to end the leases on most of the rest, the report said.

In the statement, Sports Direct said it has entered into new leases on “the majority” of HoF stores, “continues to work with landlords” on the wider store estate and is “working rapidly” on the ongoing HoF investment programme.

“It is therefore totally incorrect to assume that there will be large numbers of store closures in the new year,” the Ashley-owned company said, paving the way for a small number of closures.

House of Fraser workers have arguably had a genuine sense of job insecurity for several years, not lessened much by Ashley's acquisition of the business last year from the administrators for £90mnn.

Sports Direct, which plans to launch a HoF spin-off called Frasers, said earlier this year it regretted the acquisition and feared problems at HoF were “nothing short of terminal” as the group reported an operating loss of £54.6mln.

The group, which was voted third worst retailer in the UK with a customer score of 54% due to its “very oppressive atmosphere”, sold off its Shirebrook warehouse this year too, which had been centre of a scandal around Sport Direct’s employment practices in 2015 after an undercover investigation unearthed unorthodox and illegal working practices, leading to the warehouse being dubbed ‘the gulag’.

Quick facts: Frasers Group PLC

Price: 306.6 GBX

Market: LSE
Market Cap: £1.59 billion

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