This is fairly cheeky

One of the losing bidders for House of Fraser has urged its new owner Mike Ashley to “do the right thing” and pay all its suppliers and concession holders in full because he clinched the deal so cheaply.

Philip Day, the retail billionaire behind Edinburgh Woollen Mill, spoke out 48 hours after the Sports Direct owner snapped up the stores and assets within hours of House of Fraser entering administration.

In his first public statement since losing the battle, Mr Day called on Mr Ashley to “honourably” ensure that suppliers and concessionaires — who are collectively owed at least £70 million — are not left out of pocket.

Yes, you’ve got that right. The losing bidder, the one who offered less money, is asking that the winning bidder, the one who offered more, should pay even more. Even more and more, than he himself, that losing bidder, was prepare to offer.

9 thoughts on “This is fairly cheeky”

  1. Philip Scott Thomas

    I was under the impression that Day’s bid was in excess of £100 million, while Ashley’s was £90 million. Yet the administrators went with the lower bid for some reason.

  2. It is alleged that they ae also competing for other troubled groups: paying the suppliers for the stocks that Ashley is acquiring would shrink his firepower in the next battle. If Ashley doesn’t respond then his “goodwill” with suppliers is reduced.
    Not just cheeky – smart.

  3. How do you get to be a billionaire owning a chain of shops that no one goes in, like Edinburgh Woollen Mill? They often have concessions in garden centres, whenever I’ve walked past one they’re usually empty.

  4. Day’s businesses all seem to have been bought out of administration.

    I wonder if he did the ‘right thing’ when he acquired them?

  5. It’s even more cheeky than it looks – Day seems to have built his business by buying up the assets of bankrupt retailers and leaving their former suppliers and staff unpaid.

    Just last year, 2017, he bought the Jaeger brand from the administrators, leaving “the future of most of Jaeger’s 700 employees and payments for suppliers … unclear” (https://www.theguardian.com/business/2017/may/28/edinburgh-woollen-mill-acquires-jaeger-and-plan-to-open-50-stores)

    The main bit of his business seems to be Peacocks (cheap clothes shops?), which he bought from administrators in 2012, leaving £25.7 million unpaid to suppliers (https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9890184/Peacocks-staff-hit-by-pension-blow.html) (plus £7m owed to employees, £26m to their pension fund, and £16m of unpaid tax).

    2016 he bought the brand name and part of the assets of Austin Reed; only 2% of the £30 million owed to unsecured creditors was paid (https://www.telegraph.co.uk/business/2016/07/10/austin-reed-creditors-face-big-losses/).

    In 2008 he bought assets from the administrators of Roseby’s, which owed £11.7 million to trade creditors (https://www.walesonline.co.uk/business/business-news/companies-collapse-uk-slides-recession-2126807).

    In an impressive bit of chutzpah, earlier this year he bought Berwin & Berwin from its administrators; B&B had been a major supplier to Jaegar and Austin Reed, see above, and had lost millions when they went into administration.

    Even more impressively, in 2011 he bought the Jane Norman brand from administrators (not sure how much went unpaid to suppliers then, but apparently it had £140 million of debts), then three years later he put it into administration again and bought the brand name and stock back from the administrators, leaving £7 million of unsecured creditors unpaid (http://www.harlowinsolvency.co.uk/news/jane-norman-creditors-face-uncertain-wait).

    Nothing wrong with any of this, of course, but a bit much for him to complain about other people when they are basically following his business model.

  6. MC said:
    “Day’s businesses all seem to have been bought out of administration. I wonder if he did the ‘right thing’ when he acquired them?”

    He didn’t “do the right thing”. I just tried to put up a post listing some of the unpaid creditors, but it’s disappeared and I can’t be bothered trying to find it all again. But basically he’s bought the bits he wanted of various businesses from administrators, leaving millions unpaid to suppliers (and to employees and even the Revenue, although I can’t feel sorry for them).

    Nothing wrong with that of course, but a bit much to complain when others do it.

  7. @Jim

    Don’t knock EWM — it’s where fuddy-duddies like me go to buy our clobber now that British Home Stores is no more.

  8. If he was one of the people owed money that could be reflected in his bid, not going to pay all the other suppliers, but he’s factoring in his outstanding debts.
    Will be interesting to see what sports direct have bought it for, if they want to carry on running some type of department store may have to keep some of the suppliers/concessions on side for now to maintain the supply chain, or maybe it’s just the locations and they don’t care about goodwill

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