Fashion brands owed millions as House of Fraser's huge debt is revealed
Leading fashion brands are revealed to be owed millions of pounds following the collapse of House of Fraser, which was bought out of administration by Sports Direct a week ago today.
Ralph Lauren Polo's UK business is owed £9.4m while footwear group Kurt Geiger is owed £4.8m. Among the others to have taken big hits are Phase Eight (£3.4m), Barbour (£3m), Mulberry (£2.4m), All Saints (£1.8m) and Giorgio Armani (£1.6m). Superdry and Aspinal of London are owed hundreds of thousands of pounds, according to a report by administrator EY.
According to the BBC, fashion brands Jigsaw and Karen Millen have removed their stock from House of Fraser's stores.
Logistics provider XPO, which operates warehouses on behalf of the department store, is owed a whopping £30m and has downed tools as a result. The move has led to House of Fraser being obliged to take its website down and cancel and refund all outstanding online orders.
Sports Direct, which paid £90m for the retailer, is not legally obliged to pay its prior debts and with most of the money paid set to go to bondholders and banks, unsecured creditors could receive as little as 2p in the pound. Ashley had been urged to pay some of the debts to ensure continued ongoing good relations with some suppliers but with debts to suppliers said to be nearing £500m, it is unlikely he will be able, or willing, to do so.
However, his plans to revive House of Fraser as the "Harrods of the High Street" and retain 47 of its 59 stores, are going to be dependent upon the support of suppliers, so industry watchers say there may be some deals to be done. Meanwhile EY has maintained that the the Sports Direct bid, which saw off competing bids from retail tycoon Philip Day of Edinburgh Woollen Mill and turnaround specialists Ateri and Hilco, was the only one to offer a viable future for the chain.