Mike Ashley’s Sports Direct, owner of House of Fraser, confirmed on Friday that Manchester’s store would not be closing in January, after renegotiating rental terms on the Deansgate building.
News broke in October that the prominent department store would be closing in the city, and at the time Ashley released a statement saying that its options to save the store had been “declined” by the landlord.
Sports Direct retail group bought the House of Fraser business in August for £90m along with its full estate of 59 properties. One of the reasons for administration was cited as a £40m rent bill due before the end of the month.
Sports Direct openly said it was going through rent renegotiations with landlords across the country and in September announced which stores were safe and which were set to close. In the case of the closures, Ashley blamed “a small number of greedy landlords” who had failed to agree to Sports Direct’s terms. The Manchester store is understood to cost more than £4m each year in rent.
Speaking of the deal to keep the Manchester House of Fraser open, Ashley said: “This demonstrates that when landlords, local authorities and retailers work together, the outcomes can be outstanding. When working together we can make a real difference to the high street.”
Manchester City Council leader Sir Richard Leese said: “Today’s announcement is fantastic news for the city and I am proud that the council has been able to play a constructive role in saving a real Manchester icon and hundreds of jobs.”
The grade two-listed Kendals building was last sold in 2007 by Irish investor Sloane Capital for £75m, to a Jersey-based private investor funded by Investec.