The entire management team at UK department store House of Fraser has been fired following the collapse of the business last month.
The retailer was acquired by Sports Direct owner Mike Ashley in a GBP90m deal on 10 August, hours after the chain went into administration.
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The acquisition included all 58 stores, the brand and all the stock in the business.
The collapse hit a raft of high-end brands hard such as Giorgio Armani, Prada, Jigsaw, and Kurt Geiger – all of which were among unsecured creditors owed around GBP484m (US$379m). Mulberry revealed it took a GBP3m hit as a result of the chain’s demise.
“Following the collapse of House of Fraser on 10 August, and subsequent calls for an investigation into the circumstances of that collapse, the company [Sports Direct] today announces that we have dismissed the former directors and senior management of House of Fraser,” a statement from Sports Direct today (2 October) reads.
No detail was provided on who will replace the management team.
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By GlobalDataRichard Lim, CEO at Retail Economics, says the move signals “the momentous challenge at hand” and that with HoF operating in the part of the industry “under the most significant amount of pressure”, fast action needs to be taken to restructure the business and ensure a successful takeover.
“Drastic action has been taken following a series of woeful management decisions, clumsy execution and an outdated perception of the UK market.
“The new management team will need to prioritise right-sizing initiatives and utilise any excess space to sweat assets more effectively in a move to become fit-for-purpose in today’s digital age.”
