Mike Ashley spends Â£90million on House of Fraser - after another frustrating transfer deadline day for Newcastle United
Newcastle United owner Mike Ashley's Sports Direct has struck a deal to rescue House of Fraser out of administration for Â£90million, raising hopes for the future of thousands of staff.
In a stock market announcement, Sports Direct said it has acquired all the UK stores of House of Fraser, the brand and all the stock in the business.
Some 17,000 staff are being informed that they will be transferred over from House of Fraser to Sports Direct.
The deal was struck through a pre-pack administration process, where a company is put into administration before a new buyer cherry picks the best assets.
The tycoon beat off competition from retail rival Philip Day, the billionaire owner of Edinburgh Woollen Mill.
Joint administrator Alan Hudson said: “We have worked very closely with management, its advisors and creditors in recent weeks and are pleased that we have been able to successfully conclude a sale of the business in short timescales which preserves as many of the jobs of House of Frasers employees as possible.
"It was a challenging transaction to achieve in such a short period of time which will ensure continuity of the business and preserve the goodwill.
"We hope that this will give the business the stable financial platform that it requires to flourish in the current retail environment.”
Sources say Mr Ashley will now begin the process of turning some House of Fraser stores into Sports Direct outlets and rebrand others under the Flannels fascia.
Prior to its collapse, Mr Ashley held an 11% stake in the department store chain.
House of Fraser has a store at the intu MetroCentre in Gateshead, and others in Darlington and Middlesbrough, with the last two already earmarked for closure.
Even though the deal with Sports Direct will potentially save jobs, it is bound to spark anger among Newcastle United fans.
They are frustrated at Mr Ashley's backing for manager Rafa Benitez over the summer transfer window, which closed yesterday.
The club spent just Â£23million on new players, and actually turned a profit once sales were taken into account.