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House of Fraser pulls plug on website after warehouse dispute House of Fraser pulls plug on website after warehouse dispute
(about 2 hours later)
House of Fraser has taken its website offline amid multiple complaints from customers about delayed or failed deliveries since the company was bought by Sports Direct late last week.House of Fraser has taken its website offline amid multiple complaints from customers about delayed or failed deliveries since the company was bought by Sports Direct late last week.
The move came as it emerged that a number of fashion brands who have debts outstanding with House of Fraser, understood to include Karen Millen and Whistles, have been pulling their stock from stores as they negotiate over payment. The move came as it emerged that a number of fashion brands that have debts outstanding with House of Fraser, understood to include Karen Millen and Whistles, have been pulling their stock from stores as they negotiate overpayment.
The delivery problems come after House of Fraser’s warehouse operator, XPO Logistics, “paused” processing orders amid a dispute over payment.The delivery problems come after House of Fraser’s warehouse operator, XPO Logistics, “paused” processing orders amid a dispute over payment.
House of Fraser: The department store chain is expected to close about 12 stores after being bought out of administration by Mike Ashley. It had agreed a CVA under which 31 stores were to close, but this lapsed on administration.House of Fraser: The department store chain is expected to close about 12 stores after being bought out of administration by Mike Ashley. It had agreed a CVA under which 31 stores were to close, but this lapsed on administration.
Homebase: The DIY chain wants to close at least 42 stores via a CVA organised by new owner Hilco.  The restructuring expert bought the DIY chain for £1 from its former Australian owner Wesfarmers who botched an attempt to bring its Bunnings chain to the UK.Homebase: The DIY chain wants to close at least 42 stores via a CVA organised by new owner Hilco.  The restructuring expert bought the DIY chain for £1 from its former Australian owner Wesfarmers who botched an attempt to bring its Bunnings chain to the UK.
Poundworld: The discount retailer has closed all its 355 stores, with the loss of 5,100 jobs after falling into administration in June.Poundworld: The discount retailer has closed all its 355 stores, with the loss of 5,100 jobs after falling into administration in June.
Cau: The owner of the Gaucho and Cau steakhouses fell into administration in July leading to the closure of all 22 Cau restaurants, with loss of 750 jobs. A buyer is being sought for the 16 Gaucho outlets.Cau: The owner of the Gaucho and Cau steakhouses fell into administration in July leading to the closure of all 22 Cau restaurants, with loss of 750 jobs. A buyer is being sought for the 16 Gaucho outlets.
Mothercare: The chain is closing 60 of its 137 outlets after agreeing a CVA in May. Additional closures in July mean 900 jobs will be lost.Mothercare: The chain is closing 60 of its 137 outlets after agreeing a CVA in May. Additional closures in July mean 900 jobs will be lost.
Carluccio's: The Italian chain secured a CVA to close 30 of its 99 restaurants in late May.Carluccio's: The Italian chain secured a CVA to close 30 of its 99 restaurants in late May.
New Look: The fashion chain obtained a CVA in March to cut rents and close 60 stores, with the loss of nearly 1,000 jobs. The rent cuts – on 363 stores – were between 15% and 55%.New Look: The fashion chain obtained a CVA in March to cut rents and close 60 stores, with the loss of nearly 1,000 jobs. The rent cuts – on 363 stores – were between 15% and 55%.
Carpetright: The retailer obtained a CVA in April to close 92 of its 409 UK stores in September with the loss of about 300 jobs.Carpetright: The retailer obtained a CVA in April to close 92 of its 409 UK stores in September with the loss of about 300 jobs.
Prezzo: In March the Italian-themed restaurant group secured a CVA to close 94 of its 300 restaurants, with the loss of 500 jobs. Rent cuts were agreed on a further 57 locations.Prezzo: In March the Italian-themed restaurant group secured a CVA to close 94 of its 300 restaurants, with the loss of 500 jobs. Rent cuts were agreed on a further 57 locations.
Jamie’s Italian: The chain closed six locations in 2017 and this year agreed a CVA to close about a third of its 35 loss-making outlets.Jamie’s Italian: The chain closed six locations in 2017 and this year agreed a CVA to close about a third of its 35 loss-making outlets.
Byron: The troubled upmarket burger chain is closing up to 20 of its 67 restaurants after a CVA was agreed in January. Rent cuts have been agreed at a number of other locations.Byron: The troubled upmarket burger chain is closing up to 20 of its 67 restaurants after a CVA was agreed in January. Rent cuts have been agreed at a number of other locations.
Debenhams: The under-pressure department store chain wants to get rid of space at 30 of its 165 stores by bringing in gyms and other services.Debenhams: The under-pressure department store chain wants to get rid of space at 30 of its 165 stores by bringing in gyms and other services.
M&S: The high street stalwart wants to close 100 outlets – a third of its main stores – by 2022 as part of a 'radical transformation' plan intended to tackle years of falling sales and profits.M&S: The high street stalwart wants to close 100 outlets – a third of its main stores – by 2022 as part of a 'radical transformation' plan intended to tackle years of falling sales and profits.
XPO operates two warehouses in Wellingborough, Northamptonshire, and Milton Keynes, Buckinghamshire, that handle all House of Fraser’s deliveries to customers’ homes as well as to stores. All access to both warehouses has been closed.XPO operates two warehouses in Wellingborough, Northamptonshire, and Milton Keynes, Buckinghamshire, that handle all House of Fraser’s deliveries to customers’ homes as well as to stores. All access to both warehouses has been closed.
Alan Costello, a regional organiser for the GMB union that represents workers at the warehouse in Milton Keynes, said staff had been told to down tools on Friday and were still “sitting in the canteen playing cards”. The workers are being paid their basic wage but some will be missing out on productivity bonuses. Alan Costello, a regional organiser for the GMB union that represents workers at the warehouse in Milton Keynes, said staff had been told to down tools on Friday and were still “sitting in the canteen playing cards”. The workers were being paid their basic wage but some would be missing out on productivity bonuses.
XPO, one of the biggest logistics firms in the UK, is potentially owed millions of pounds, according according to the Times, which first revealed problems at the warehouse. The paper said XPO had blocked access to a Sports Direct truck which had attempted to pick up stock from Milton Keynes. XPO, one of the biggest logistics firms in the UK, is potentially owed millions of pounds, according to the Times, which first revealed problems at the warehouse. The paper said XPO had blocked access to a Sports Direct truck which had attempted to pick up stock from Milton Keynes.
XPO is among thousands of suppliers who House of Fraser has written to saying it will not cover money owed ahead of Friday, when Sports Direct bought the business out of administration. In total, suppliers are thought to be owed more than £60m.XPO is among thousands of suppliers who House of Fraser has written to saying it will not cover money owed ahead of Friday, when Sports Direct bought the business out of administration. In total, suppliers are thought to be owed more than £60m.
Some suppliers have started taking action as negotiations continue. Jigsaw has removed stock from all 20 stores to which it is a supplier. These brands run concessions in the department store and so own unsold items. Ownership of that stock was not passed to administrators or included in Sports Direct’s purchase. Some suppliers have taken action as negotiations continued. Jigsaw has removed stock from all 20 stores to which it was a supplier. These brands run concessions in the department store and so own unsold items. Ownership of that stock was not passed to administrators or included in Sports Direct’s purchase.
Concessionaires were owed money for stock that had been sold over the previous few months and which was due to be paid on Wednesday if House of Fraser had not gone into administration.Concessionaires were owed money for stock that had been sold over the previous few months and which was due to be paid on Wednesday if House of Fraser had not gone into administration.
Legally, Sports Direct has no obligation to pay suppliers as their debts are part of the administration. Suppliers are not expected to recoup more than 3p in every £1 from the administrators. However, new owners often agree to settle at least some of these debts in the interest of maintaining good relations. Legally, Sports Direct has no obligation to pay suppliers as their debts were part of the administration. Suppliers were not expected to recoup more than 3p in every £1 from the administrators. However, new owners often agree to settle at least some of these debts in the interest of maintaining good relations.
A source close to Sports Direct said that it was dealing with suppliers on a case by case basis. A source close to Sports Direct said it was dealing with suppliers on a case by case basis.
“XPO is unwilling or unable to get involved with us and that’s hampering our progress and impacting customers’ deliveries ... and potentially putting at risk the rescue operation,” the source said. “XPO is unwilling or unable to get involved with us and that’s hampering our progress and impacting customers’ deliveries … and potentially putting at risk the rescue operation,” the source said.
Ashley is hoping to keep 47 of 59 House of Fraser stores open and had pledged to turn the retailer into the “Harrods of the high street” bringing in more luxury brands. Ashley was hoping to keep 47 of 59 House of Fraser stores open and had pledged to turn the retailer into the “Harrods of the high street” bringing in more luxury brands.
Sports Direct has already begun discussions with landlords about reassignment of leases on House of Fraser stores, which the company is currently running under licence from the department store’s administrator. Sports Direct has already begun discussions with landlords about reassignment of leases on House of Fraser stores, which the company has been running under licence from the department store’s administrator.
However, competition has already emerged as landlords for 10 to 15 sites are understood to be in discussion with Ashley’s rival Philip Day, the owner of Edinburgh Woollen Mill, who has offered to pay more than House of Fraser currently pays in rent on those sites. However, competition has already emerged as landlords for 10 to 15 sites were understood to be in discussion with Ashley’s rival Philip Day, the owner of Edinburgh Woollen Mill, who has offered to pay more than House of Fraser currently pays in rent on those sites.
Sports Direct said on Wednesday it was “committed to creating stability as soon as possible and building exciting plans for the future.”Sports Direct said on Wednesday it was “committed to creating stability as soon as possible and building exciting plans for the future.”
The retailer said it had cut a deal with Massarella Catering Group to continue to run 47 cafes in House of Fraser stores, some of which have been closed since the weekend.The retailer said it had cut a deal with Massarella Catering Group to continue to run 47 cafes in House of Fraser stores, some of which have been closed since the weekend.
Mark Massarella, the managing director of the group, said: “Although this does not overcome all the difficulties that we have sustained through the administration of House of Fraser, I am hopeful that we will be able to retain more of our business than we had originally expected.”Mark Massarella, the managing director of the group, said: “Although this does not overcome all the difficulties that we have sustained through the administration of House of Fraser, I am hopeful that we will be able to retain more of our business than we had originally expected.”
House of FraserHouse of Fraser
Retail industryRetail industry
Sports Direct InternationalSports Direct International
Mike AshleyMike Ashley
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