House of Fraser has cancelled all of its outstanding online orders and pledged to refund customers as its warehouse dispute triggers “significant delays”.

The department store retailer has said it will not be processing any online orders or returns from shoppers.

The retailer plans to get in touch with impacted customers in the coming days, many of whom have been enquiring about the delivery of their purchases since the firm’s website was taken offline earlier this week.

In a statement, House of Fraser said: “Due to significant delays with delivering online orders, we have taken the decision to cancel and refund all orders that have not already been sent to customers.

“We do not take this decision lightly, but since we cannot give our customers clear assurance of when their orders will be delivered, we believe cancellation is the best option.”

The retailer, which was snapped up by Sports Direct founder Mike Ashley last week for £90m, has had its distribution centre operations grind to a halt due to an ongoing dispute over payments.

Warehouse operator XPO Logistics has downed tools at the department store chain’s fulfilment centres as a result of being informed it would not receive payment for orders processed prior to Ashley taking ownership of the chain.

XPO handles all of House of Fraser’s online deliveries to shoppers as well as store deliveries, and is one of over 1,000 suppliers that will be financially worse off due to not receiving payment from the retailer for work done prior to Ashley’s acquisition.

Sports Direct has no legal obligation to pay off the department store chain’s suppliers, as their debts were written off as a result of the retailer falling into administration.