Four more House of Fraser department stores are to close down after Mike Ashley’s Sports Direct failed to agree a new, lower rent deal with the stores’ landlord.
The stores, in Nottingham, Norwich, Gateshead’s Metrocentre and the Lakeside shopping centre in Thurrock, Essex, all belong to the property business Intu.
The new closures, which will cease trading in the new year, are likely to lead to hundreds of job losses.
In a statement, Ashley said: “ We had multiple meetings with Intu but we were no further forward after 14 weeks. Unfortunately, these stores now face closing in the new year.”
In a direct criticism of Intu, Ashley added: “I urge other institutional landlords to be more proactive to help save the HoF stores in their schemes.”
The Sports Direct billionaire, who swooped on House of Fraser in August when it collapsed into administration, has been trying to negotiate rent cuts for the stores. In September, when he announced the closure of the Edinburgh, Hull and Swindon stores, he blamed “greedy” landlords, who refused to be “reasonable”, for the shutdowns.
The tycoon has warned that time is running out for rent deals to be arranged.
In October two other closures were also announced, in Exeter and Shrewsbury. Kendals in Manchester is also to close, along with House of Fraser stores in Cirencester and Chichester.
Intu is the subject of a bid from a group of investors to take the business private. On Wednesday morning the company said it had given the bidder, led by Intu’s deputy chairman John Whittaker with backing from Saudi and US investors, extra time to make a firm offer.
Intu owns 14 shopping centres, including Eldon Square in Newcastle, the Trafford Centre in Manchester and Merry Hill, near Dudley.
A spokesman for Intu said Ashley had informed the company he was shutting down the stores on Wednesday morning: “We have been advised this morning that the four House of Fraser stores in our portfolio will be closing in early 2019.”
The spokesman added: “We have had numerous meetings with Sports Direct, including at the highest level, to try to agree terms. While we cannot discuss the detail, we have been unable to reach agreement.”
Intu said the closures represent about £4.3m of its rental income and 526,000 sq ft of retail space and said it was “enthusiastic about the opportunity to re-engineer and re-let this underperforming space to new and exciting alternatives.”
The Intu statement acknowledged that finding tenants for big spaces is an uphill task, as so many major retailers are closing space. Debenhams and Marks & Spencer are both closing shops. Intu said it might consider “non-traditional shopping centre uses”.
When House of Fraser went into administration it had 59 stores and nearly 16,000 staff, either directly employed or working at in-store concessions. When Ashley bought the business from the administrators he paid £90m and said he hoped to keep 47 outlets open, turning them into “the Harrods of the high street”.
There are currently 22 House of Fraser stores that have been saved from closure, saving an estimated 3,500 jobs.
• This article was amended on 16 November 2018. An earlier version placed the Metrocentre in Newcastle, rather than Gateshead.
