28 March 2024, 14:22
By Furniture News Jan 29, 2019

House of Ashley – a retailer response

Sports Direct owner Mike Ashley is making play after play for leading retail brands – the latest being bids for Sofa.com and HMV. But what did the members of our retailer panel make of his purchase of House of Fraser last summer?

Following mixed responses to its restructuring plan, House of Fraser was briefly placed into administration in August – to be acquired for £90m by Sports Direct tycoon Mike Ashley, who promised to keep the majority of the retailer’s stores open.

Since then, closures – and the subsequent fallout with suppliers, logistics and concession partners – have remained in the headlines. Does the panel feel that this august department store brand is in safe hands?

Peter Harding (Fairway Furniture): That’s the million-pound question! He certainly knows how to turn around businesses, but taking on a high street business which has such fundamental and deep-rooted problems will test even his skills.

Ross Beveridge (Archers Sleepcentre): Mike Ashley has already built an extremely successful retail portfolio and has vast shareholdings in many recognised brands. Being a self-made billionaire, it would be hard to suggest he is not an astute and shrewd business man. Having already had an 11% share in House of Fraser, I can only assume he sees an opportunity to not only move into a more upmarket retail department store, but believes he can run the business better with the experiences he has gained.

He also owns a 30% share in Debenhams, so this does not seem like a blind leap into the world of department stores.

He has, of course, had his share of controversies – such as the failure to meet mandatory minimum wages and the overuse of zero-hour contracts at his Sports Direct warehouses. I would hope working conditions do not deteriorate for the many currently employed at the surviving branches of House of Fraser – I’m sure they’ve all been through enough lately.

Steve Pickering (Sussex Beds): Although some might say his style is controversial, he is a successful business figure. House of Fraser obviously requires significant change, and I’m sure Mike Ashley will deliver this needed change – maybe not to the tastes of some if he follows the formula used within Sports Direct, but this model has bucked a trend in a difficult, evolving retail background.

This article is an extract of Furniture News' annual Year in Review feature, which quizzes a panel of leading independent retailers on some of the biggest industry developments taking place each year. Read more here.

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