Billionaire Mike Ashley is new Baron of the Bonnie Banks
Mike Ashley, the new owner of House of Fraser and Jenners at Lomond Shores.
Special report by Bill Heaney
West Dunbartonshire was holding its breath anxiously today awaiting news on the future of the Jenners House of Fraser store at Loch Lomond Shores after it was announced that the whole Fraser group had been bought for £90 million by the controversial Sports Direct multi-billionaire Mike Ashley.
The Balloch store was not been listed amongst those being axed when the closure of 31 of the Fraser stores was announced last month, but staff were biting their nails when news was then leaked that the whole company was going into liquidation.
The sigh of relief was almost audible today from the staff at Jenners and local companies and public bodies such as Scottish Enterprise, the Loch Lomond Park Authority and West Dunbartonshire Council, all of whom have a special interest in Lomond Shores.
MSP Jackie Baillie welcomed the rescue, but her warm words came with a warning attached.
She said: ““This has been a deeply worrying and stressful time for thousands of House of Fraser employees and Jenners employees across the country. I know that the uncertainty has had an impact on staff in the Jenners store in Lomond Shores as well.
“The news that a deal has been struck to save the company is welcome, but Mike Ashley must now provide these workers with clarity.
“Mr Ashley must make saving as many jobs as possible his top priority and he must also guarantee that he will not usher in the same unfortunate and inappropriate working practices at his Sports Direct firm into department stores across Britain and here at Balloch.
“The Jenners store at Lomond Shores is a flagship and a real jewel in the crown for us locally. It is also one of the best performing stores in the group, and I hope that Mr Ashley will recognise the quality and loyalty of the staff involved and ensure that there is a bright future for many years to come.”
It appears certain that Mike Ashley’s advisers will be going back to the drawing board with the company’s previously announced store closure plans – and that the future of all 60 of the Fraser group stores will be re-assessed.
Lomond Shores’ future was in the balance if Jenners had gone to the wall.
When the 31 closures were announced, Frank Slevin, chairman of House of Fraser, said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.
“Our legacy store estate has created an unsustainable cost base which, without restructuring, presents an existential threat to the business.
“So, whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”
Jenners at Lomond Shores is a premium department store with a wealth of top-name designer fashion brands including Ralph Lauren, Hugo Boss and Barbour, as well as high street favourites, Oasis, Coast and Phase Eight.
Other big names include Fleet, Guess, DKNY and Radley. The beauty department stocks the latest fragrances and make-up from brands including Clarins, Elizabeth Arden and Molton Brown, and the homeware department has gifts and art from the Breeze Gallery.
The Scottish/Italian food and wine company Valvona & Crolla Foodhall and the nearby café with its views of Loch Lomond and the Maid of the Loch are hugely popular with visitors, local shoppers and bus parties.
Mike Ashley is a larger than life character who fell out spectacularly with Rangers Football Club and their Alexandria-born chairman, Dave King.
A High Court judge said bosses at Rangers and Sports Direct, which has a busy shop in Dumbarton Town Centre, owner Mike Ashley should “try to make peace” after being told a merchandise deal row had settled.
Mr Justice Phillips had heard how the deal, which allows a company in the Sports Direct group to sell replica Rangers kits and other branded products, was expiring.
He had been told that bosses at Rangers wanted to sign a new deal with a third party, but SDI Retail Services executives objected and said they should have a chance to match any new offer.
House of Fraser – which began trading 169 years ago – employs 16,000, 5,900 directly and 10,100 in the concessions.
Sports Direct said in a statement: “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.”
Mike Ashley already held an 11 per cent stake in the department store chain.
House of Fraser’s administrators, from accountants EY, said the retailer had been in “a race against time to secure sufficient funding to secure its future” ever since the Chinese firm C.banner pulled out of a rescue deal earlier this month.
Alan Hudson, one of the four administrators from EY, said the Sports Direct deal “preserves as many of the jobs of House of Fraser’s employees as possible”.
“It was a challenging transaction to achieve in such a short period of time which will ensure continuity of the business and preserve the goodwill. We hope that this will give the business the stable financial platform that it requires to flourish in the current retail environment.”
Mr Ashley’s plans for the Fraser stores chain are not clear and could include re-branding some stores as Sports Direct, but this is unlikely to happen at Lomond Shores.
He has said previously that he wants to turn his sporting goods fashion chain, which he founded in 1982, into “the Selfridges of sport”.
As well as 750 Sports Direct stores, Mr Ashley has investments in Debenhams and French Connection, and he also owns the clothing chain Flannels.
Other contenders to take over House of Fraser had included Mike Ashley’s retail rival Philip Day, who owns the Edinburgh Woollen Mill chain (bought from the Stevenson family who owned the Antartex village in Alexandria), Jaeger and Austin Reed.
House of Fraser had said on Thursday that it wanted to secure financing by 20 August.
This is the date when payments were due to concessions inside the House of Fraser stores.
Nigel Lugg, group executive chairman of Prominent Europe, which supplies Chester Barrie menswear to House of Fraser, said it was “good news” that the business had been saved.
But, he said, suppliers will have hoped the business would avoid administration so they could be paid in full.
“I can’t see the suppliers getting a lot of money out of the system,” Mr Lugg told the BBC, adding suppliers often received 2p to 3p in the pound in cases of administration.
His business would be fine but, he said, “it could impact into other UK suppliers”.
“There is a lot of money trapped in the system,” Mr Lugg said.
House of Fraser has two main types of relationships with its suppliers: wholesalers who are paid in advance for their stock or concessions which are on a payment schedule when items are sold.
The popular retail knight whose family founded the House of Fraser
The Fraser name is linked with West Dunbartonshire and Helensburgh through its association with Sir Hugh Fraser, pictured right, who was recently described as “filthy rich, flamboyant, dashing and enterprising … a genuine 10-carat playboy who worked hard and partied even harder.
His sensational life story reads like the script of a Hollywood movie and his jet-setting, adrenaline-fuelled existence made headlines all over the world.
Sir Hugh, a big-hearted philanthropist, who died suddenly in 1987, aged just 50, left a multi-million-pound legacy that is still changing lives.
The one-time chairman of Dumbarton Football Club set up the Fraser Foundation in 1960. It has donated in excess of £50 million to good causes in Scotland.
His daughter, Patricia, said: “He was larger than life and everyone who met him couldn’t help liking him.
“He treated everyone in his many businesses the same, from the managers right down.
“He was the most generous man I have ever met and the Hugh Fraser Foundation is testament to his generosity.
“The foundation has given away £9million in the last five years to charities and organisations in Scotland and in the last financial year they have given away more than £2million.
“I don’t know the exact amount donated in the foundation’s 57 years but it must be in the region of £50million, which is quite incredible.”
From hospices, hospitals and art galleries to church halls, theatres and pipe bands, Sir Hugh’s legacy has helped them all over the years.
“Glasgow School of Art, Dundee’s Victoria and Albert Museum, Kelvingrove Art Gallery and Glasgow’s new Sick Kids hospital are just some of the places to benefit in recent years.
Sir Hugh married his second wife, show jumper Aileen Ross, from Gartocharn on Loch Lomondside, in the West Indies in 1973. They separated three years later and she died in an air crash in 1984.
Mike Ashley was being widely quoted last night as wanting House of Fraser to become “the Harrods of the High Street,” but one is left wondering if he knows the history of the business and that Sir Hugh lost the famous London department store at the roulette tables in a city casino.
That store and Sir Hugh’s Herald, Times and Scottish and Universal Newspapers chain of weekly newspapers, including the Lennox Herald, were taken over by LONHRO headed up by Tiny Rowland.