More House of Fraser department stores will be closing in the New Year, Sports Direct boss Mike Ashley has warned.
Ashley – whose business stepped in to save the department store last year – said that while some stores were not paying rent they were still “unsustainable”.
When House of Fraser went into administration, it had 59 stores, two warehouses and employed almost 16,000 staff. It has been reported that seven of those stores have been closed.
Ashley says more stores will shut in 2020 unless the government undertakes a fundamental review of the business rates system, which he describes as “broken and unworkable”.
The Sports Direct boss says the current rates regime “is clearly helping to kill much of what remains of the UK high street” and that large stores were coming under particular pressure from the property-related tax.
“We cannot keep loss-making stores open,” says Ashley. “We are continuing to review the longer-term portfolio and would expect the number of retained stores to continue to reduce in the next 12 months”
He adds: “We are doing as much as we can to realistically save as many jobs and stores as possible.”
He has not revealed how many stores might close but hinted that a decision would be taken within months.
The group’s chairman, David Daly is more optimistic about the future of House of Fraser.
He remarks: “We are starting to see the green shoots of recovery as we continue to integrate the business into the group.”