Sports Direct’s Mike Ashley has finally trousered a department store chain after years of trying, buying House of Fraser from the administrators for £90m. This includes 59 stores (and all stock) and, potentially, 15,000 or so employees including concessions.
Ashley (below) also owns Newcastle United and £90m probably isn’t that much more than manager Rafa Benitez was hoping for to sign some players in the transfer window (he didn’t get it). The stock must be worth nearly that. Ashley previously owned 11 per cent of HoF.
HoF is a throwback to the ‘Are You Being Served’ era of retailing (back in the day it used to own Harrods) and some of its stores, like the flagship in London’s Oxford Street and others in upscale locations like Bath, seem to trade well. Quite what Ashley, who’s continued Tesco founder Jack Cohen’s philosophy of ‘pile it high, sell it cheap,’ will make of his new acquisition is anyone’s guess but it probably won’t be Harrods.
When he bought the famous Lillywhite’s sports goods store on Picadilly Circus, famous for its ski products and with a wooden horse where you could test out saddles, it just became Sports Direct in a nicer building.
But the UK’s struggling high street needs some fresh thinking and, whatever you say about Ashley, he’s hardly scared of making changes.
We wait to see what awaits the three ad agencies – Creature, Who Wot Why and The&Partnership – who were, somewhat optimistically, pitching for HoF right up top the moment of administration. Ashley is not known for spending on branding and advertising.
The&Partnership’s founder Johnny Hornby is noted for his ability to get on with challenging entrepreneurs.
Ashley could be his biggest test yet.