House of Fraser blames ‘greedy landlords’ for blocking Mike Ashley’s attempts to save stores

The retailer warned 'time is running out' for new deals to be negotiated with landlords

House of Fraser has said “greedy landlords” are blocking new owner Mike Ashley’s attempts to negotiate lower rents and save stores from closure.

The Sports Direct founder bought the department store out of administration earlier this month.

Before the company collapsed, it had announced plans to shut 31 of its 59 stores. However, Mr Ashley vowed to keep 80 per cent of branches open.

So far, it is believed seven stores have been saved, including the flagship on London’s Oxford Street. However, more closures look set to go ahead at other branches, after the retailer warned “time is running out” to negotiate new deals with landlords.

A spokesperson for House of Fraser said: “Some landlords are being very collaborative in order to give us a chance at turning the business around, giving House of Fraser a lifeline and saving hundreds of jobs.

“However, some greedy landlords would rather see the stores close than help save the jobs of hundreds of people.

“We will continue to try and convince these landlords but ultimately time is running out. Some closures will be announced.”

It is understood that landlords are reluctant to agree to the low rents Mr Ashley is demanding.

Melanie Leech, chief executive of the British Property Federation, criticised House of Fraser for its approach to the rent negotiations.

“What has been taking place is negotiations between House of Fraser and its landlords – a two-party process – where each party will have its own interests and one party simply can’t cry ‘unfair’ in the media when it doesn’t get what it wants,” she said.

“Many property owners are investing in and managing property on behalf of pensioners’ savings, and depend on occupiers being able to pay rent. The long-term health of our high streets also depends on this.

“There will be a range of factors to consider on a store-by-store basis but what property owners won’t be doing is simply leaving stores empty for the sake of it – that would be in no one’s interests.”

Mr Ashley has said he wants to make House of Fraser the “Harrods of the high street”, with plans to introduce luxury brands such as Gucci and Prada to the product offering.

The Newcastle United owner also said whole floors of larger House of Fraser branches could be given over to Sports Direct or Flannels, the designer store chain he already owns.

Since Mr Ashley took over the store, House of Fraser has stopped accepting gift cards and vouchers, and cancelled all online orders.

More than 600 jobs are at risk at warehouse operator XPO, due to the fact that it is owed more than £30m by the retailer. However, under the terms of Sports Direct’s purchase, it is under no obligation to pay any House of Fraser debts.