Today marks a year since Sports Direct tycoon Mike Ashley’s acquisition of House of Fraser. Retail Week looks at how his dream of creating a ‘Harrods of the high street’ is shaping up.


Since Mike Ashley took control there have been sweeping changes at the top of House of Fraser. Ashley sacked the senior management team in October, just weeks after buying the department store chain.

In a one-sentence statement, Sports Direct revealed that it had “dismissed the former directors and senior management”.

Mike Ashley Poland Street 2

Mike Ashley has overhauled the leadership team of House of Fraser

Alex Williamson, the short-lived chief executive who was hired from Goodwood in the pre-Ashley era to turnaround the department store chain, has since been appointed chief executive of the Bridgepoint Development Capital-owned firm Inspiring Learning, a business that seeks to improve the lives of young people.

Former chief marketing officer Paddy Earnshaw left in October and has since joined DIY retailer B&Q as its customer director.

Ashley’s soon to be son-in-law Michael Murray, who is Sports Direct’s head of elevation and charged with taking the business upmarket, is now taking an active role alongside Ashley at HoF – the pair are known as ‘Little Mike’ and ‘Big Mike’ respectively.

Murray was originally responsible for renegotiating store leases on stores and deciding which to shut.

The only member of the former HoF executive team to survive the October cull is understood to be retail director Gary Slattery, who has been at the business since 2007 after joining from Matalan.

Buying and merchandising director for beauty and home Ruth Newman is another House of Fraser senior management member who has been kept on.

She was not on the executive team but is understood to be held in high regard by Ashley and Murray because of her experience in the beauty category – crucial in department stores and one which Ashley has less experience of.

Sports Direct-owned Flannels head of brands Carl Tallents is also understood to play a central role and a number of executives report into him.


In the first year of Ashley’s stewardship, the House of Fraser offer has shifted significantly – but not perhaps in the direction the Sports Direct owner originally indicated.

When he first took control, he unveiled ambitions to make House of Fraser the “Harrods of the high street”. However, there have been many detractors of the progress, or lack thereof, in the first year.

RAH Advisory founder Richard Hyman says the offer “has changed quite considerably”.

HoF Sports Direct

Brands previously sold in House of Fraser have been replaced by Sports Direct stock

“Quite a number of the brands are not there anymore and have been replaced by Sports Direct stock,” says Hyman. “The fit is not that good because Sports Direct is a low-price retailer mainly and House of Fraser is meant to be an aspirational department store.

“Placing a load of luggage for clearance that is set out like a corner of Sports Direct does not sit very comfortably. Some space in stores is not being traded any more, such as restaurants and cafes.”

Retail consultant Graham Soult also highlights the closure of in-store cafes. In Middlesbrough’s House of Fraser, the entire floor the cafe is on has been closed.

“For me, one of the things department stores need to do is pull people in with their food and drink offer, it feels counterintuitive to close down the restaurants,” he says.

Soult believes House of Fraser stores are still very much in a state of “flux”.

“It very much feels it is treading water a bit, hopefully it will all settle down and make sense but it is not entirely clear where the end destination is,” says Soult. “You have got some quite premium brands that have left the store, leaving significant gaps.”

Chanel cosmetics, Clarins beauty salons, LK Bennett and Fragrance Shop are some of the key brands that have abandoned House of Fraser, while Ashley has also called time on its struggling own brands.

However, he has pledged to suppliers that he will bring in upmarket brands such as Gucci and Burberry that are stocked in his Flannels chain.

Ashley has also begun to stock some of the other brands he owns, such as Agent Provocateur, in House of Fraser stores.

Soult believes Sports Direct brands’ appearance in House of Fraser does not necessarily mean the store environment needs to reflect that of a Sports Direct store.

“You can make even value product look quite decent if you display it correctly,” says Soult. “Primark is the master of that.”

Soult believes the current appearance of many of the House of Fraser stores has largely been out of the control of Ashley.

“It is a function of what he inherited,” says Soult. “If you look at the House of Fraser estate you have stores like Carlisle, Doncaster and Swindon that have clearly not had a lot of love for a long time.

“Even the ones in really old buildings, there is still scope to turn them into something if you have the vision. The Bath department store, which trades under the name Jolly’s had a revamp. They have made a virtue of its higgledy-piggledy nature by trying to create a more boutique feel, stripping back later additions and celebrating the history of the place.

“It will take oodles of money because many of these have been neglected for a long time. It is the same issue as BHS - if you have neglected the estate for a long time then even if you have a new concept the practicalities of rolling that out don’t always stack up in terms of the finances.”

House of Fraser Glasgow

Stores such as Glasgow will be converted to the high-end ‘Frasers’ fascia

Ashley is preparing to convert a number of the House of Fraser stores into a mini-luxury chain called Frasers.

Soult says: “Mike Ashley has shown with Flannels that he can do high-end. If you go to Flannels in Middlesbrough or Newcastle it is beautiful and the quality of the merchandising and fit-out and lighting is spot on.

“It shows he knows how to create a premium environment when he feels like it. If he can somehow combine elements of the Flannels in-store theatre and attractiveness with all these brands he is snapping up and a good chunk that have historically been in House of Fraser, and add a really good food and drink and beauty offer, then you can start to see how that might all hang together.”

However, Hyman says he has always taken Ashley’s ambitions with a pinch of salt.

“Flannels is a tiny business trading from small footprints,” says Hyman. “The idea you can translate that to something six-, seven- or eight-times bigger is like thinking that after winning a couple of games Accrington Stanley can do well in the Champions League. I will believe it when I see it.”

Market share

House of Fraser’s fashion market share in the 52 weeks to July 1, 2018 was 1.7%. A year later that had declined to 0.9%, according to Kantar data shared with Retail Week by an industry source. On a 12-week basis to the same date, the comparative numbers were 1.5% and 0.7%.

Mintel retail analyst Chana Baram says its most up-to-date data, which covers up until the end of 2018, shows House of Fraser market share has slipped since Ashley’s takeover.

The decline was primarily driven by store closures and House of Fraser’s online troubles and as a result, Baram says the “loss of market share was always to be expected”.

Baram expects no drastic changes in market share since the turn of the year because House of Fraser has made “no major strategic changes”.

“Total market size [for department stores] has held up, there is slight growth,” he adds. “In general, luxury department stores have been doing well but with the lower end it is a different story.”

Store estate

One of the main problems for Ashley when he took over was what could be generously described as a tired and disjointed store estate, many of which hadn’t seen proper investment from previous owners in many years.

At the time, Sports Direct vowed to keep open 47 of the 59 stores he took on when he saved HoF – including seven that had been earmarked for immediate closure, including its Oxford Street branch.

A year on, there are 54 House of Fraser stores still trading. While only five stores have closed, many property experts believe this number will almost certainly increase.

House of Fraser

Ashley bought the Oxford Street store to save it from closure

One source says he can see the estate shrinking to between “20 and 30” stores, or perhaps even lower.

Another says he thinks the ideal estate would be larger, “between 30 and 40 stores” but says that will come down to landlords and whether or not they go along with Ashley.

Research from the Local Data Company (LDC) shows 18 House of Fraser stores are in areas with 10% or less of ‘premium retail’ around them that may indicate areas House of Fraser could look to exit.

LDC head of retail and strategic partnerships Lucy Stainton says this shows “Sports Direct’s plans to invest in a new, premium format might be best focused on sites in London and the South East given that these locations have the highest proportion of premium retailing in the surrounding catchments”.

Ashley has history of playing hardball with landlords, and many think his ongoing dealings will be no different.

One property source said: “Some of the existing House of Fraser stores he picked up don’t really deserve to exist anymore. Mike and his team will have looked at some of the stores that are doing well and will have decided that they might be willing to pay something in rents, but a lot of the stores aren’t in good positions.

“He’ll no doubt go to those landlords and say ’give me another year rent-free and I might be able to turn these stores around but, if you try and push me into a corner, I can just as easily walk’. Those landlords will probably think ‘even if he’s paying us two-thirds of nothing in rents, at least we won’t have business rates liabilities.’”

Ashley described problems at the department store chain as “nothing short of terminal in nature” at Sports Direct’s results most recent presentation.

Despite that, one retail property expert says it may not be as dire as Ashley says. He may be painting a grimmer picture as a means of getting rent holiday leverage over landlords.

Underinvestment in the physical store space is another problem that must be addressed.

Ashley has said the enhancement of House of Fraser’s “retail proposition continues to be a strategic priority” and touched on the “active management of our property portfolio, which is seeing us continue to open a new generation of stores”.

“The sites have been suffering from a massive case of underinvestment for many years”

Simon Copes, Skopes

Foremost of those was the £95m purchase of the flagship Frasers store in Glasgow, which Ashley said was “a statement of intent regarding our seriousness about the business” and a nod to future stores “which will showcase our superior experiential offerings”.

Yet, he also noted it was “disappointing to see a business [House of Fraser] which has been underinvested [in] and poorly managed as ultimately the employees and the consumer suffer the most”.

Joint managing director of fashion brand Skopes, Simon Cope, agrees with Ashley.

Skopes has had concessions with House of Fraser for over a decade. Cope points out that before Sports Direct came in “many of the stores were a bit run down, some didn’t have any air conditioning or things like that. The sites have been suffering from a massive case of underinvestment for many years.”

One property source says that “some of the sites haven’t been touched since the 1970s”.

While the state of some existing House of Fraser buildings cannot be blamed on Sports Direct, some believe the amount of capital required to refit and modernise the estate is simply too much. As one property expert puts it, the cost would be “completely astronomical”.


Sports Direct’s results showed that House of Fraser had generated revenue of £330.6m and gross transaction value of £527.6m. The department store business lost £54.6m at a pre-tax level.

Nestled in the results, there was further bad news about House of Fraser’s drain on the wider group’s bottom line. Underlying EBITDA fell 6% to £287.8m in the 52-week period. Without the acquisition of the department store chain, it would have climbed 10.9% to £339.4m.

Under the previous management of Chinese giant Sanpower, HoF was also dogged by poor trading. In the six months to July 29, 2018, like-for-like sales slumped 5.2%, online sales dropped 9.8% and EBITDA losses widened from £900,000 to £8.6m.

“I am pleased and grateful to say that the vast majority of brands understood we were here to help, our vision for the future”

Mike Ashley, Sports Direct

Ashley has piled blame on the former owners and previous chair Frank Slevin – who he said “exemplified City greed and excess” – for the issues.

Ashley said Sanpower indulged in “excessive and unsustainable outsourcing and financing” and sold off brands “to its Chinese parent shortly before” House of Fraser tumbled into administration.

The tycoon said on a scale of 1-5, with one being very bad and five being very good, “House of Fraser is a one, albeit we are trying very hard to turn the business around, but this will not be quick, and it will not be easy”. 

Even though Ashley envisages a “bright future” for House of Fraser, he said “with the gift of hindsight” he might not have bought the business at all in August 2018.


As a result of the administration, a number of brands chose to abandon their House of Fraser concessions. 

The Sports Direct tycoon struck a sympathetic tone on their exit.

House of Fraser womenswear dept

Several brands have abandoned their HoF concessions

“Based on either misplaced optimism or falsehoods from House of Fraser management, the brands put more skin in the game than management deserved and paid a price for their loyalty,” he said.

“We had to quickly work with these brands to get the business moving again and restore trust and I am pleased and grateful to say that the vast majority of brands understood we were here to help, our vision for the future and saw a mutually beneficial opportunity going forward.”

For Cope, much of Ashley’s analysis of the previous management and the state of House of Fraser when he came in is spot on.

“Our experience trading with Sports Direct since they came in has been positive in all areas. We have met with all of the senior staff on several occasions and have found them to be very professional and honest with us,” he says.

Cope says while some of the Skopes concession in House of Fraser have been trading in “single-digit negatives” over the last financial year “that was always expected” when Sports Direct took over, and he says that Ashley has “always paid us”.

He believes in Sports Direct’s plan for turning around HoF and trusts it will work out over the long term. “Rome wasn’t built in a day, after all,” he says. 

One year on, there’s little evidence of the ‘Harrods of the high street’, but some at least believe that may not prove a mirage.