House of Fraser cancels online orders and offers refunds

Labour MP Frank Field

Labour MP Frank Field wants Mike Ashley to seize control of the pension scheme

XPO could now be owed tens of millions of pounds, but under the pre-pack administration deal in which House of Fraser was acquired, the purchases are able to discard existing pension liabilities and creditor claims.

The high street chain was bought-out by Sports Direct last week after it went into administration.

House of Fraser took its website offline yesterday amid complaints from customers about delayed deliveries since the company was bought by Sports Direct last week.

"All customers affected will receive an email about the cancellation and refund in the next couple of days".

Customer gift cards and vouchers will also no longer be accepted online or in store.

"Please accept our apologies for any inconvenience caused and thank you from everyone at House of Fraser for your patience at this time".

These problems have been exacerbated by a decision by warehouse operator XPO Logistics to temporarily close access to two warehouses dedicated to House of Fraser deliveries as it plays hardball in negotiations.

Sports Direct "has no legal obligation to pay suppliers money owed before its buyout as their debts were part of the administration", adds the paper, but new owners "often agree to settle at least some of the debts in the interest of good relations".

According to The Guardian, fashion retailer Jigsaw has removed stock from 20 stores, and brands including Karen Millen and Mint Velvet are also understood to have withdrawn some stock.

Richard Lim, chief executive of economics research consultancy Retail Economics, believes the acquisition is a "hugely ambitious move" for Sports Direct. "The stores are failing to attract sustainable levels of footfall while battling against rising operating costs and shifts in shopper behaviour".

It's thought that XPO has called for Mike Ashley to honour the contract terms it held with its previous owner.

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