Sports Direct's House of Fraser purchase draws a cautious response
The purchase by Sports Direct of department store group House of Fraser drew a cautious response from analysts
Some saying the deal could backfire on Mike Ashley, the sportswear retailer’s founder and chief executive.
Ashley, who also owns English Premier League soccer club Newcastle United, on Friday snapped up the 169-year-old House of Fraser’s 58 UK stores, its brand and its stock for 90 million pounds hours after it collapsed into administration.
He has given away little about his plans for the company, beyond stating that he would keep as many stores open as possible and transform the chain “into the Harrods of the High Street” - a reference to the Qatari-owned luxury department store in London that was once owned by House of Fraser.
Shares in Sports Direct were down 1.7 percent at 1015 GMT on Monday, reflecting concerns about the wisdom of the acquisition given Ashley’s disastrous investment in rival department store group Debenhams (DEB.L). Sports Direct last month booked an 85 million pound charge on that investment.
“It is far from clear if he really knows what he has taken on,” said independent retail analyst Nick Bubb.Published: by Radio NewsHub