Luxury goods brand Mulberry has become the latest victim of House of Fraser’s administration after warning it is taking a GBP3m hit linked with the retailer’s collapse.
The upmarket handbags and accessories firm has joined brands including Giorgio Armani, Kurt Geiger, Versace, Gucci, Prada and Jigsaw who are among unsecured creditors owed around GBP484m (US$379m) when the department store retailer collapsed last week.
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It was sold hours later to Sports Direct, owned by controversial retail tycoon Mike Ashley, for GBP90m. The so-called ‘pre- pack’ deal does not oblige Ashley to pay suppliers money owed before the acquisition.
As reported on just-style last week, House of Fraser has cancelled all online orders following a dispute with its warehouse operator XPO Logistics, which is owed GBP30m (US$38.2m) by the department store group.
House of Fraser’s website was taken offline on Wednesday amid the payment dispute with XPO Logistics, which operates two warehouses that handle the retailer’s deliveries to stores as well as customers.
A source told just-style that Ashley and his team have been working closely with various different suppliers and creditors to try and agree a way forward but said that XPO has been “completely unreasonable.” There is currently no engagement, and no plans for any engagement, with no stock moving in or out of the warehouses, the source said. The website remains offline today (20 August).
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By GlobalDataMulberry, which has 21 concessions in House of Fraser stores across the UK, said it is expecting to provide GBP3m for exceptional costs in the results for the six months to 30 September 2018.
It added that the UK market remains challenging “and sales in House of Fraser stores have been particularly affected. If these sales trends in the UK continue into the key trading period of the second half of the financial year, the Group’s profit for the whole year will be materially reduced.”
