House of Fraser: Hundreds of jobs at risk at warehouse operator owed £30m by department store chain

Sports Direct is not obliged to repay any of the creditors still owed money by House of Fraser

House of Fraser to shut 31 stores and put 6,000 jobs at risk

Hundreds of jobs are said to be at risk at warehouse operator XPO following the sale of House of Fraser to Mike Ashley.

Up to 600 warehouse roles are said to be under threat after the department store was bought out of administration by Mr Ashley’s Sports Direct earlier this month.

According to documents released by EY, who were called in as administrators after House of Fraser failed to convince creditors to agree to a rescue deal, XPO is owed more than £30m by the retailer.

Under the terms of the administration, Sports Direct is not obliged to pay any of the companies owed money by House of Fraser.

The GMB union said the news was a “massive blow” to its members based at XPO depots in Wellingbrough and Milton Keynes who have been “left in limbo”.

“When companies like House of Fraser crash, history shows that asset stripping is often the consequence,” said Alan Costello, GMB organiser.

“You’ve got to question the motives for this buyout and ask whether Mr Ashley has got the interests of the company and its workers at heart.

“There are more than 600 people desperately worrying about their futures and how they’re going to be able to put food on the table for their families.

“It’s time for Mike Ashley to show that his rescue plan for House of Fraser is not simply a plan to boost his bank balance at the expense of House of Fraser workers and our members.”

GMB said it will be “fighting hard to ensure members are treated fairly and to save as many jobs as possible”.

A spokesperson for XPO said reports of job cuts could not be confirmed at this time.

On Tuesday it was confirmed that the House of Fraser flagship store on London’s Oxford Street had been saved from closure, having earlier been earmarked to shut under a company voluntary arrangement.

Meanwhile, on Monday, shares in luxury handbag maker Mulberry suffered their worst one-day drop in two decades after it warned the failure of House of Fraser would have a £3m impact on its profits.

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