Express & Star

Mike Ashley plans to keep most House of Fraser stores open

Retail tycoon Mike Ashley says he aims to save 80 per cent of House of Fraser's stores after buying the business out of administration for £90 million.

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Mike Ashley has ambitious plans for House of Fraser, but it is still not known if they include Beatties in Wolverhampton (top right)

His plans are in stark contrast to the company's previous bosses, who planned to close more than half the 59 stores, including Beatties in Wolverhampton, as part of a rescue plan that collapsed last week.

And Mr Ashley has singled out the huge House of Fraser store in Birmingham's Corporation Street – one of those previously set for closure – to outline his vision of his plans to turn the business into "the Harrods of the high street".

Speaking to The Sun in his only interview since the takeover deal on Friday, Mr Ashley said he would try to keep 80 per cent of the 59 outlets open.

Mike Ashley's Flannels luxury brand store in Birmingham's Burlington Arcade

The Sports Direct billionaire and Newcastle United owner said: “In a year’s time you can hold my feet to the fire on that.”

One way forward is to introduce a top-drawer click-and-collect service at House of Fraser He explained: “In Harrods you get some exceptional services. What we would like to do is introduce a ‘concierge click and collect’ at House of Fraser.

“When you go online and say you want to collect goods in-store, you should be able to book a time, book a changing room and book a stylist.

“You get that kind of personal shopping service in a Harrods. There’s no reason why it couldn’t be rolled out nationally across House of Fraser.”

Mr Ashley's Sport Direct business also owns the Flannels designer chain, which sells big name fashions from Dolce & Gabbana, Jimmy Choo, Gucci, Moschino and Michael Kors.

And Mr Ashley believes the key to House of Fraser's future is introducing more of those kind of luxury brands.

As well as stores in Birmingham's Burlington Arcade and in Solihull, Flannels has more than 20 branches nationwide with up to a dozen more in the pipeline including a flagship Oxford Street shop to open next year.

Sports Direct, which also owns around 30 per cent of Debenhams, already owned 11 per cent of House of Fraser when it bought the business and all its stores and stock just a couple of hours after it went into administration on Friday.

It followed the collapse of the previous £70 million rescue deal after Chinese group C.banner pulled out. That plan would have seen 31 stores, including those at Wolverhampton, Birmingham, Telford and Shrewsbury, closing just after Christmas with the loss of 6,000 jobs.

The company currently employs around 16,000 people, around two thirds of them working at concessions within the stores.

In the interview Mr Ashley said Gucci, Prada, Stone Island and Mallet footwear were “the biggest thing missing” as House of Fraser ran into trouble and he now intends to stock the stores with successful “cool brands of the moment”.

He said: “We think the biggest and most important thing House of Fraser is missing is luxury brands. We think it will make a big difference."

Mr Ashley continued: “It is not taking away from House of Fraser, but adding to it.

“If you get the right product, it is not on the shelves for long.”

Larger House of Fraser stores, such as the one in Birmingham, could see whole floors turned over to Sports Direct or Flannels, he said.

Another store he suggested could be saved is House of Fraser's flagship in Oxford Street, in London. But Mr Ashley needs to win over suppliers, concessionaires and landlords to back his plans if they are to succeed.

Many landlords are already feeling frustrated and angry after facing huge losses from the original rescue plan, which would have left them holding empty stores.

Mr Ashley admitted that landlords have been “battered and bruised” by the number of struggling shop chains that have had to seek rent cuts or just closed hundreds of stores so far this year

In a message to the landlords, he said: “Give us a chance and we will try to keep as many open as we can. We are here to get House of Fraser back to where it once was.”

Retail experts say Mr Ashley will need to make drastic changes if House of Fraser is to entice shoppers back. And that will need significant investment on top of the £90m he has already paid for the business.

Sofie Willmott, senior retail analyst at data and analystics company GlobalData, commented, ‘‘Mike Ashley could harness his mixed portfolio of retail businesses to transform House of Fraser, combining his more premium fascias Agent Provocateur and Flannels, which sells brands like Burberry London, Fendi and Sophia Webster, to create a more upmarket department store. Although very few of House of Fraser’s own brands remain, those such as Issa and Biba would slot into this new format.’’

Given the success of luxury department stores like Selfridges and Harrods, she believes Mr Ashley’s strategy will be to replicate their model using House of Fraser’s locations, with the aim to transform the retailer into ‘the Harrods of the high street’.

However, Ms Willmott said it was questionable whether the high-end price points would appeal nationwide, particularly given that London-based department store retailers have benefited from tourism.

She said: "Stores located outside city centres with smaller catchment areas could become Sports Direct branches however, with around 750 existing Sports Direct branches and clothing & footwear offline spend forecast to decline out to 2022, there is really no need for any more."

She suggests there may be opportunities to relocate current Sports Direct stores to House of Fraser locations if they offer more space to house both products and leisure options like gyms, which Mr Ashley has recently introduced in the Thurrock branch.

Sofie Willmott added: "Breaking up stores to create smaller units would be a better option in areas with a lower population, attracting local independent retailers or food service and leisure operators and helping to create more vibrant and unique town centres.

"Ultimately as the new owner of 59 House of Fraser stores, Sports Direct must ensure that however it decides to adapt the branches, they are relevant for the local community in order to drive spend and protect their future."