May 7, 2018
House of Fraser shareholder Sports Direct sues over business plan
May 7, 2018
A minority shareholder of Britain’s House of Fraser, Sports Direct, is suing the department store chain to gain access to its business plan, after House of Fraser announced a major restructuring this week.
House of Fraser said on Wednesday it would close some of its stores as a condition of securing new funds from Chinese retailer C.banner, which will become the majority owner of the department store group with a 51 percent stake.
Sportswear chain Sports Direct, which owns 11.1 percent of House of Fraser, said on Saturday that it had applied to London’s High Court for an injunction requiring House of Fraser to provide a copy of its corporate plan and other information.
“We have been frozen out by House of Fraser. Their dealings in China are opaque, and it is blatant that we have been unfairly prejudiced,” Sports Direct’s head of strategic investments, Liam Rowley, said.
A spokeswoman for House of Fraser declined to comment.
C.banner, a major retailer of mid-range to premium footwear brands in China, bought famous London toy shop Hamleys in 2015.
House of Fraser was founded in 1849 and has stores in 59 locations across Britain and Ireland, including London’s Oxford Street.
As part of the restructuring, House of Fraser has said it will seek to sell stores via a company voluntary arrangement (CVA), an agreement with creditors to pay them for a fixed period while it continues trading.
House of Fraser intends to launch a formal CVA proposal early next month. A source close to the company said its management met regularly with Sports Direct founder and chief executive Mike Ashley, and would give him more details about the CVA when appropriate.
Sports Direct does not have a representative on House of Fraser’s board.
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