Business

Mike Ashley blames greed for House of Fraser store closures

Mike Ashley Image copyright Getty Images
Image caption Mike Ashley bought House of Fraser for £90m

Sports Direct billionaire Mike Ashley has blamed "greedy landlords" for the closure of three House of Fraser department stores.

Mr Ashley, who bought the retailer out of administration for £90m, announced on Sunday that 15 sites previously earmarked for closure will stay open.

But stores in Edinburgh, Hull and Swindon will close after the failure of negotiations over cuts in rents.

Landlords have hit back, saying "each party will have its own interests".

In a statement, House of Fraser said at least 20 stores have now agreed new rental terms, safeguarding about 3,500 jobs.

However, in addition to the three closures, a fourth store in Bath is also at risk of closure as the businessman negotiates with council authorities, the outlet's landlord, over new rental terms.

Hundreds of staff affected by the three store closures are now going through redundancy consultation.

After buying House of Fraser in August, Mr Ashley said he was hopeful that most of the department store chain's 59 sites would remain open.

His Sports Direct bought all the stores, including the 31 that had been earmarked for closure under a previous restructuring plan that has now been abandoned.

'Pull together'

Mr Ashley, who also owns Newcastle United football club, said on Sunday: "I am disappointed that in my opinion a small number of greedy landlords still refuse to be reasonable.

"We've showed what we can achieve on the British high street when we work together with landlords.

"I would like to thank those landlords who have helped us to rescue approximately 3,500 jobs at the stores we have saved to date.

"I am calling on everybody to pull together, including landlords and local authorities in order to help to save as many House of Fraser stores and jobs as possible on the great British high street."

Mr Ashley has previously warned about "greedy" landlords, saying in August that "time is running out" to keep stores open.

Crying 'unfair'

The British Property Federation, which represents landlords, defended their right to negotiate the best deal.

Chief executive Melanie Leech said: "What has been taking place is negotiations between House of Fraser and its landlords - a two-party process - where each party will have its own interests and one party simply can't cry 'unfair' in the media when it doesn't get what it wants."

She pointed out that many property owners are investors working on behalf of pension funds and savers.

"There will be a range of factors to consider on a store-by-store basis but what property owners won't be doing is simply leaving stores empty for the sake of it, that would be in no one's interests," she said.

Among the latest stores to be rescued is the one in Birkenhead, the constituency of MP Frank Field, who has clashed with Mr Ashley over his treatment of Sports Direct workers.

Mr Field described news that his local store was saved as "tremendous", adding: "Six weeks ago, I wrote to Mike Ashley with an urgent plea to safeguard the future of our House of Fraser and the jobs of the store's staff.

"Thanks to the positive discussions that have taken place since then with the store's landlord, this cornerstone of our town centre is being given a chance to flourish once again," Mr Field said.

The stores at which new rent terms have now been agreed are: Altrincham, Aylesbury, Birkenhead, Camberley, Carlisle, Darlington, Doncaster, Grimsby, High Wycombe, Lincoln, London (Oxford Street), Middlesbrough, Plymouth, Skipton, Telford, Huddersfield, Leeds, Maidstone, Solihull and Sutton Coldfield.

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