The move came after House of Fraser, which employs 17,000 people directly and through contractors, on Friday went to court to seek protection from creditors.

(Bloomberg)–U.K. billionaire Mike Ashley swooped in to rescue the House of Fraser Ltd. department-store chain for 90 million pounds ($115 million), staving off collapse for an anchor of the country’s troubled shopping districts. House of Fraser is No. 62 in the Internet Retailer 2018 Europe 500.

Ashley’s Sports Direct International Plc (No. 50) agreed to acquire the 169-year-old retailer’s U.K. stores, brand name and inventory. The move came after House of Fraser, which employs 17,000 people directly and through contractors, on Friday went to court to seek protection from creditors.

“This is a hugely ambitious move for Sports Direct,” Richard Lim, CEO of Retail Economics, said in a statement. “Turning around the business will not come easy.”

The agreement averts a new dark turn for Britain’s retail crisis after the failure of bricks-and-mortar institutions such as Maplin Electronics, the U.K. arm of Toys R Us and department-store operator BHS. Pressure from online retailers such as Inc. and a rise in costs stemming from the pound’s Brexit-induced weakness are crippling the chain stores.

Mid-market retailers like House of Fraser, founded as a textile shop in Glasgow in 1849, have been hit particularly hard, with rivals Debenhams Plc (No. 30) and Marks & Spencer Group Plc (No. 26) shrinking store space as their online businesses have been slow to take off. More than one-quarter of the U.K.’s largest department stores have shut since 2010, according to retail consultancy Altus Group.


Ashley’s retail empire

The deal expands Ashley’s retail empire, which also includes a stake in Debenhams. A self-made billionaire who also owns the Newcastle United football club, Ashley is a colorful figure on the U.K. retail scene, describing himself in courtroom testimony last year as a “power drinker” with a penchant for late-night pub antics. Sports Direct has faced scrutiny of its labor conditions from U.K. lawmakers.

Ashley was one of at least four parties squaring off to rescue House of Fraser after China’s C.banner International Holdings Ltd. shelved plans to buy a majority stake. In a bid to avert collapse, House of Fraser in June laid out plans to close more than half of its 59 stores in the U.K. and Ireland, prompting protests from some landlords.

Lim at Retail Economics said it’s likely Ashley will rebrand some House of Fraser sites as Sports Direct. The sporting-goods chain’s pretax profit fell 73% in the latest financial year, largely due to a one-time charge related to the Debenhams investment.

Though the deal salvages at least some of House of Fraser’s stores, the squeeze on U.K. retailers is set to continue as merchants wrestle with a range of pressures, including recent property tax increases for many.

“This is yet another significant High Street rescue mission, and the crisis shows no sign of abating,” Michael Mulligan, insolvency specialist at law firm Shakespeare Martineau, said by email. “With interest rates rising and less money in the pocket of the U.K. consumer, more household names may be at risk.”