Reports have emerged suggesting that Sports Direct, a well-known British retailer specializing in sporting goods, is contemplating the closure of a substantial number of House of Fraser stores. The Financial Times indicated that up to two-thirds of the 59 originally planned closures under the previous management could be axed.
The decision comes on the heels of a 6% dip in Sports Direct’s annual core earnings, largely attributed to the difficulties encountered in assimilating the House of Fraser acquisition. CEO Mike Ashley, the driving force behind the purchase, recently confessed to the possibility of having erred in taking over the department store business.
Acquiring House of Fraser for 90 million pounds ($109 million) last August was envisioned as a strategic move by Sports Direct to broaden its retail presence. However, the company has grappled with profitability issues at the bought-out outlets.
Repeated attempts to obtain commentary from Sports Direct outside normal business hours have been met with silence. If indeed a substantial number of House of Fraser stores do close, there will be a considerable shake-up in the UK retail scene, where many shoppers have become accustomed to the offerings of the department store chain. The future trajectory for House of Fraser within the retail sector remains uncertain, as Sports Direct charts its course through these challenges.
For more information on the Sports Direct story, visit Reuters and BBC News.
