The ‘will he or won’t he?’ question had been swirling around Sports Direct owner Mike Ashley for weeks. Some thought he would splash the cash to protect his shareholding, others that he would sit on his hands and do nothing.

Liz Hamson

Last week, we got the answer when the football transfer window shut and, having sold more players than it bought, Ashley’s Newcastle United ended up making the largest net profit of any Premier League club, much to the frustration of manager Rafa Benítez.

Or more accurately, we got one answer. If the long-suffering Toon Army were angry about the Newcastle owner’s reluctance to shell out on boosting the football club’s squad, they were apoplectic when it emerged that Ashley was prepared to fork out to protect another investment and that the answer to the ‘will he or won’t he?’ question was ‘yes’ in relation to House of Fraser.

They were in the minority, of course. The news that Ashley had parachuted in at the 11th hour to rescue the chain, which had been in a tailspin since entering into a CVA and last week fell into administration, albeit for just a few hours, was cautiously welcomed by landlords and the chain’s workforce.

While there were a few grumbles about the prospect of zero-hour contracts, most could not believe that the chain had not just been yanked back from the brink of the abyss, but that it faced a brighter future than it had under the CVA, following Ashley’s pledge to keep 47 rather than 28 of the 59 stores operational (although potentially at significantly reduced rents).

The question now is: what happens to those stores? The assumption is that Ashley will turn floors in larger stores over to his Flannels or Sports Direct brands. While the latter may not seem like a good fit with House of Fraser’s higher-end fashion offer, much the same was said of the Sainsbury’s-Argos tie-up, but that appears to have worked out OK for both parties.

Another suggestion is that Ashley could roll Debenhams and House of Fraser together. He has already built up a near-30% stake in the struggling chain and if he did take it on alongside House of Fraser, the potential cost and rental savings would be huge, especially in locations that also feature a Sports Direct (such as Croydon’s Centrale shopping centre). However, the flipside of merging the two entities under one roof would be significant voids, so in the longer term Ashley’s gain could well lead to further landlord pain.

Mike Ashley Sports Direct

Will Mike Ashley still be smiling about his House of Fraser acquisition in the coming weeks?

There is another potential complication that could derail Ashley’s plan to create the “Harrods of the high street”.

As Property Week went to press, our sister title Drapers reported that Philip Day, the owner of Edinburgh Woollen Mill Group, was in talks with a group of landlords to take over several House of Fraser stores and offering to pay higher rents than are currently paid by House of Fraser.

You have to question how smart that would be when high rents are one of the reasons House of Fraser is thought to have got into trouble in the first place, but clearly landlords are going to be more amenable to rent rises than rent cuts – and presumably, therefore, to Day rather than Ashley.

So while we may no longer be talking about the fall of the House of Fraser, there are a few more twists and turns to go before we find out exactly how the story ends.