The House of Fraser stores in Nottingham, Norwich, the Lakeside shopping centre in Essex and Metrocentre in Gateshead will close in the new year after Sports Direct failed to agree a deal with landlord Intu, Drapers can reveal.
Drapers understands the stores will be taken back by Intu in February and March next year.
A spokesman for Intu said: ”We have been advised this morning that the four House of Fraser stores in our portfolio will be closing in early 2019, representing around 1% of our secured rent and 526,000 sq ft of retail space.
“We have had numerous meetings with Sports Direct including at the highest level to try to agree terms. While we cannot discuss the detail, we have been unable to reach agreement.
“We are enthusiastic about the opportunity to re-engineer and re-let this underperforming space to new and exciting alternatives. We have a strong track record of re-purposing space as with the example of the former Sainsbury unit at intu Merry Hill, now one of Next’s largest stores in the UK. Ideas on the table include not only other large-scale retailers but also non-traditional shopping centre uses.
“Of the four stores, two are city centre locations and two are super-regionals, each offering unique opportunities. Our teams are looking at bespoke solutions that will create the right tenant mix to meet the needs of the local market, attracting more customers and ultimately benefitting all our tenants.”
As previously reported, the House of Frasers in Manchester, Cirencester, Shrewsbury, Hull, Swindon, Edinburgh, Chichester and Exeter are all closing. Drapers understands the store in the City of London is also due to close in January.
Since Sports Direct boss Mike Ashley bought House of Fraser in a pre-pack administration deal on 10 August, its stores are thought to have been operating on licences that allow them to close down with two months notice.
Ashley is also said to have offered landlords short term leasing deals tying rents to store performance, and has also offered to pay business rates on some large stores, but no rent.
A spokesman for Sports Direct said: ”We had various meetings with the landlord, Intu Properties, and adopted a flexible approach. Despite our best efforts we have been unable to agree reasonable terms for these stores to continue trading.
”Sadly, we are now in consultation with staff about the fact these stores face closure. We hope other institutional landlords will continue to work with us in order to save stores and jobs.”
Ashley added: “We had multiple meetings with Intu, but we were no further forward after 14 weeks. Unfortunately, these stores now face closing in the new year. I urge other institutional landlords to be more proactive to help save the HoF stores in their schemes.”