Sports Direct strikes £90m rescue deal for House of Fraser

The exterior of the King William Street branch of House of Fraser can be seen here in central London

Image House of Fraser lenders seek 'best and final' bids to save store chain

House of Fraser at Rushden Lakes will be open as normal today (Friday) despite the company calling in the administrators.

Sports Direct boss Mike Ashley has reportedly agreed to pay £90million for the chain - which includes an Aylesbury Friars Square Shopping Centre store which was already scheduled for closure. Even within a struggling industry, the likes of House of Fraser look like relics of the Edwardian era, about as relevant to the 21st century as typewriters and video players.

Sports Direct has ridden to the rescue of House of Fraser after owner Mike Ashley stepped in with a £90m deal which will take the ailing department store chain out of administration.

Following the deal, Mike Ashley said: "This is a massive step forward and further enhances our strategy of elevation across the Group".

"This is about global tax arrangements, because most of the online businesses are worldwide businesses".

It is understood that Mr Day's proposal was in excess of £100 million, would have avoided an administration and included House of Fraser's pension scheme.

Newcastle United owner Mike Ashley has always been rumoured to have been interested in buying the department store giant - as well as Philip Day, chief executive of Edinburgh Woollen Mill.

However, accountancy giant EY, which was overseeing the process, opted for Mr Ashley's offer.

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"It is vital that we restore the right level of ongoing relationships with the luxury brands".

Last month Sports Direct booked a charge of 85 million pounds for its disastrous investment in Debenhams - a rival department store group to House of Fraser.

This left the department store chain without any options but to enter administration and hope for a buyer.

The deal will see the tycoon tighten his grip over the British high street, adding to his sports retailing and "premium fashion" empire.

The billionaire has held an 11% stake in the business since 2014 and also owns nearly 30% of Debenhams, its main rival.

House of Fraser had said in June it needed to shut 31 stores and make up to 6,000 people redundant to survive, but that rescue programme was thwarted after Chinese group C.banner pulled out of a plan to inject fresh equity.

Like other retailers, House of Fraser has been stung by soaring costs and falling consumer spending power.

Another first was that it was the retailer's first sustainable and green store.

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