House of Fraser chain goes into administration

The troubled department store needs new funding by no later than next week

This nearly certainly will leave at least part of the pension fund in the hands of the Pension Protection Fund as well as the continued prospect of job losses but helps to keep the doors open at some House of Fraser locations including the iconic former Kendal's site on Deansgate, Manchester.

Later this morning, Sports Direct boss and Newcastle United owner, Mike Ashley, stepped in to buy the ailing department store.

House of Fraser has gone into administration and been rescued at a knock-down price by the Sports Direct founder Mike Ashley.

The move means the company will takeover all the stores, including the one in The Oracle in Reading, Berkshire.

The retailer said "significant progress has been made" in reaching a sale of the group's business and assets.

The announcement came just two hours after the formal court hearing to put House of Fraser into administration.

Notices placed on the doors of the Belfast department store said it would open later than usual at 11am on Friday after the chain entered administration.

A statement released on behalf of House of Fraser before the deal was struck said: "House of Fraser announces that its discussions with interested investors and its main secured creditors have not concluded in a solvent solution".

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At that time chief executive Alex Williamson said: "We are hopeful that the current negotiations will shortly be concluded".

"An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength".

Why did House of Fraser enter administration?

Sources said that Mr Ashley will now begin the process of turning some House of Fraser stores into Sports Direct outlets and rebrand others under the Flannels fascia.

"Despite the very recent termination of the transaction between Cenbest and C.banner, I am confident House of Fraser is close to securing its future".

As part of a deal, Chinese retailer C.banner would have taken a 51% share in the firm.

While the department store entered rescue talks with a number of different companies, these have continued to break down over the past few months. It is understood that House of Fraser is up to date with payments to suppliers, but may need to find about £15million ahead of monthly rent bills due before the end of August.

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