Work stops at House of Fraser warehouse in payments dispute

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All work has stopped at the House of Fraser warehouse at Wellingborough as a result of a dispute between operator XPO Logistics and Sports Direct, which bought the HoF business last week. The retailer’s web site is currently down as a result.

Administrators were appointed by House of Fraser on 10th August and the assets were sold on to Sports Direct within hours for £90m. The deal included all UK stores, the HoF brand, and all the stock in the business.

The dispute was revealed by  “The Times” on Wednesday which said XPO is calling on Sports Direct to honour the existing contract between House of Fraser and XPO. It said that staff were turning up for work at the warehouse and being paid, but no work has been done since Friday.

Sports Direct is not commenting publicly on the situation.

It is currently in talks with creditors of the House of Fraser business. Sports Direct founder Mike Ashley has already said that he hopes to keep open 80 per cent of the 59 HoF stores, and turn the business into the “Harrods of the high street”.

Under the restructuring plan put in place by the previous owners 31 stores were earmarked for closure including the flagship Oxford Street store in London.

Sports Direct has appointed CBRE as advisor in its negotiations with the chain’s landlords.

However, sources close to Sports Direct said it was finding it difficult to engage with XPO and there are now concerns that failure to agree a deal could have an impact on the rescue plan.

XPO Logistics, which operates both the Wellingborough and Milton Keynes for House of Fraser, is not making a formal comment on the situation.

  • The House of Fraser web site was down on Wednesday (15th August), and the retailer has been warning customers of delays to some online deliveries following the recent change of ownership, saying on Twitter: “Regrettably, due to the recent change in ownership, some orders have been delayed. We don’t currently have a timescale for delivery. However, your order will be delivered as soon as possible.”

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