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House of Fraser’s administrators considered selling the 159-year-old department store chain for £1 before accepting Mike Ashley’s £90m offer.
EY, the accountancy firm which oversaw the sale, said offers from 48 interested parties were considered with two of those believed to be the most viable: Mr Ashley’s Sports Direct and an unnamed bidder offering £1.
The unsuccessful bid would have seen House of Fraser’s secured creditors write off the vast majority of their loans, with the repayment of the remaining balance to be deferred.
The retail billionaire is said to be willing to pay higher rents than House of Fraser, a move that risks infuriating new owner Mike Ashley.
EY also confirmed that House of Fraser burned through £65m in the 12 months to the end of January, as the chain’s financial position deteriorated rapidly.
The department store chain cancelled all online orders and shut down its website after warehouse operator XPO Logistics stopped processing orders last week because of a payment dispute.
Death of the British high street? The retailers affected
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The retailer said the decision was made due to delays with delivering online orders. House of Fraser also told customers on Thursday that their gift cards and vouchers would no longer be accepted online or in store.
The high street chain collapsed into administration last week, and was quickly snapped up by Mr Ashley.
The retail tycoon has since outlined his plans to make House of Fraser into the “Harrods of the high street” and has vowed to keep 80 per cent of stores open.
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