House of Fraser has temporarily pulled its website following complaints from customers over non-delivery of orders after its buyout by Sports Direct’s Mike Ashley last Friday.
Logistics provider XPO, which had been left out of pocket after the business was briefly placed into administration to enable its sale to Ashley, had paused on processing orders while the non-payment was disputed.
According to reports, staff at the two warehouses in Wellingborough, Northamptonshire and Milton Keynes, Buckinghamshire, which XPO operates on behalf of House of Fraser fulfilling orders for online and store deliveries, had downed tools.
The Times has reported that a Sports Direct lorry that was sent to the Milton Keynes warehouse to collect stock was denied entry to the site.
XPO is believed to be owed millions of pounds by House of Fraser but the temporary administration meant that all previous debts were wiped out with unsecured creditors only expected to get around 3p in the pound. Ashley and Sports Direct have written to suppliers saying they will pay for all stock and services from the administration onwards.
Legally there is no obligation for Ashley and Sports Direct to pay debts racked up by the firm under its previous owners but in some cases new owners do settle prior debts in part of in full to maintain good relations with suppliers. Losing bidder, Philip Day, has urged Ashley, who paid £90m for the business, to pay suppliers who are said to be in total around £70m out of pocket.
Ashley has said he hopes to keep up to 47 of House of Fraser’s 59 stores open (a previous CVA plan had sought to close more than half of its stores) and a source close to the situation told The Guardian that XPO’s actions were jeopardising the rescue operation. “XPO is unwilling or unable to get involved with us and that’s hampering our progress and impacting customers’ deliveries … and potentially putting at risk the rescue operation,” the source told the newspaper.