House of Fraser bought by Sports Direct for 90m pounds

Struggling Chinese-owned chain collapsed into administration

British retail tycoon Mike Ashley has agreed to buy department store chain House of Fraser for 90 million pounds ($114 million) after the shops, previously owned by Nanjing-based company Sanpower Group, went into administration.

In 2014, Sanpower, owned by Chinese billionaire Yuan Yafei, paid 480 million pounds for an 89 percent stake in House of Fraser but since 2016, it has sought to sell stakes in the group, with only limited success.

Ashley already owned 11 percent and earlier this month, C.banner, the Hong Kong-listed owner of world famous London toy shop Hamleys, pulled out of a 70 million pound rescue deal, throwing the future of the department store into turmoil.

On Friday, House of Fraser went into administration after talks between the retailer and its creditors collapsed but shortly afterwards, Ashley struck a deal following talks with insolvency specialists at accountancy firm Ernst & Young.

The company employs 17,500 people including 11,500 who work at concessions within its 59 shops. All House of Fraser stores opened as usual on Friday, including the 31 that have already been earmarked for closure.

In a statement, Ashley's Sports Direct group said "The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business".

Ashley, who also owns Premier League football club Newcastle United, is reported to have considered buying a department store chain for several years. He also has a 29.7 percent stake in House of Fraser rival Debenhams and has investments in fashion chain French Connection.

House of Fraser's fall into administration was the biggest failure on the UK high street since the collapse of BHS in 2016 with the loss of 11,000 jobs.

It is the latest setback for British retailers in 2018, following the closing of electronics store Maplin, Poundworld and the country’s biggest toy retailer, Toys R Us UK.