House of Fraser appoints administrators as hopes of rescue fade

The exterior of the King William Street branch of House of Fraser can be seen here in central London

British department store House of Fraser will seek the appointment of administrators today after negotiations with its investors and creditors failed to conclude in a "solvent solution".

Reading's House of Fraser store could have been saved after the company was bought out by Sports Direct. That includes all the stores that had been set for closure this Christmas, under a previous rescue plan that would have sacrificed 31 of House of Fraser's 59 stores to save the rest of the business.

House of Fraser employs about 6,000 people directly and 11,500 concession staff.

Mike Ashley, the founder of Sports Direct, is said to be close to striking a deal to buy the chain out of administration, Sky News reports.

"Pursuant to the transaction, the group has acquired all of the United Kingdom stores of House of Fraser, the House of Fraser brand and all of the stock in the business".

The announcement continued: "Significant progress has been made towards completing a sale of the group's business and assets".

House of Fraser at Rushden Lakes will be open as normal today (Friday) despite the company calling in the administrators.

EY, which is likely to be appointed administrators, is expected to continue those discussions in hopes of reaching a deal "shortly after their appointment". Stores were delaying opening until 11am, however.

Potentially nodding to Mike Ashley's rumoured interest, House of Fraser chief executive Alex Williamson had said: "We are hopeful that the current negotiations will shortly be concluded".

"An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength".

It is understood that Mr Day's proposal was in excess of £100 million, would have avoided an administration and included House of Fraser's pension scheme.

Frank Slevin, chairman said: "This".

House of Fraser was plunged into crisis last week after C.banner, the Chinese owner of Hamleys, pulled its investment in the troubled retail chain. "The demise of House of Fraser in many ways has been the result of poor leadership, paralysis in innovation and crippling levels of debt", Mr Lim added.

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