Further closures of high street department store cookshops are imminent as unsustainable branches of House of Fraser are expected to shut over the year ahead. The news came from Mike Ashley, chief executive of the department store’s owner, Sports Direct when a statement was released with the group’s financial results (for the period ending April 28).
House of Fraser (with 54 remaining stores) reportedly made a £54.6m operating loss.
In his statement, Mike Ashley talked about the discovery of serious issues at department store chain (acquired by Sports Direct from administrators in August 2018), stating that: “the problems are nothing short of terminal in nature.”
He elaborated: “Serious under investment in stores and appropriate support services, excessive and unsustainable outsourcing and financing, and selling brands to their Chinese parent shortly before administration are just some of the many problems faced.”
Despite working closely with landlords and local authorities, some stores that are paying zero rent are still unprofitable and will be earmarked for closure.
However, Mike Ashley referred to the possibility of a “bright future for House of Fraser” in the longer term. His statement said: “In a scale out of 5, with 1 being very bad and 5 being very good, House of Fraser is a 1, albeit we are trying very hard to turn the business around this will not be quick and it will not be easy.”
