Ashley set to close House of Fraser after Christmas

House of Fraser CVA

Mike Ashley’s Sports Direct is believed to be preparing to shut down almost every House of Fraser store at the end of the crucial Christmas trading period as the entrepreneur prepares to call time on his doomed investment in the department stores.

With seven of the 59 retail outlets empty, Sports Direct is either not paying rent or preparing to end the leases on most of the rest, making it easier for Mr Ashley to end his association with the retailer, according to a report in The Sunday Telegraph.

The tycoon founded Sports Direct in 1982, having opened his first shop in Maidenhead the previous year. He has grown it into a FTSE 250 business that employs about 26,500 staff and generated annual revenues of £3.7 billion last year. Mr Ashley has acquired numerous companies in recent years, including, Evans Cycles and Game Digital, and bought stakes in Debenhams and Goals Soccer Centres.

Sports Direct last year bought House of Fraser out of administration for £90 million, taking control of 64 sites, including three offices, two warehouses and the stores portfolio.

Mr Ashley, 54, has previously said that he plans to close several House of Fraser stores at the beginning of next year as he prioritises plans to launch a spin-off from the brand, called Frasers.

The entrepreneur has already admitted that he regrets buying the retailer, part of his attempt to “save the high street”, which is suffering from a downturn driven by online shopping and deteriorating consumer sentiment.

Mr Ashley has described the business as “nothing short of terminal”.

Sports Direct took an estimated £150 million hit on its 29 per cent stake in Debenhams, which this year used a company voluntary arrangement, a form of insolvency, to secure a rent reduction. Mr Ashley last month lost a court case contesting the move, which in effect wiped out the value of Debenhams shares.