House of Fraser offered cash injection by Mike Ashley
Struggling House of Fraser is understood to have been approached by Sports Direct founder Mike Ashley over a fresh investment deal.
By Katie HopeBusiness reporter, BBC News The sports chain owns an 11.1% stake in House of Fraser, which last month detailed plans to close 31 of its 59 shops as part of a rescue deal. According to Sky News, House of Fraser needs £50m to prevent it collapsing. But sources close to the department store chain have denied the chain's survival is under threat. The department store chain has previously said it has no short-term funding issues. Creditors have already backed House of Fraser's restructuring, but a group of landlords is taking them to court over the plan which has thrown it into doubt. The landlords claim the plan - which will see their rents slashed - is unfair to them. The department store chain is currently awaiting a £70m investment from Chinese investor, C.banner, which also owns toy shop Hamley's. C.banner said in May it planned to take a majority stake in House of Fraser, but has said it will not go ahead with the deal until the store closure and rent reduction rescue plan is agreed. Mr Ashley is believed to have approached House of Fraser around four weeks ago, before landlords challenged the retailer's rescue deal. He is understood to have told House of Fraser's advisers he could "offer something better" than C.banner. Mr Ashley could not be reached for comment. House of Fraser is using company voluntary arrangements (CVAs), a form of insolvency proceedings, to overhaul its business. CVAs are being increasingly used by struggling retailers as a way to close stores, but landlords argue that they are being abused as a quick way to cut rents. House of Fraser is one of a number of retailers struggling amid falling consumer confidence, rising overheads, the weaker pound and the growth of online shopping. Electronics chain Maplin and toy chain Toys R Us both collapsed into administration earlier this year. Other High Street chains such as Mothercare and Carpetright have been forced to close stores in order to survive. The House of Fraser Group has annual sales of £1.2bn. It employs about 5,000 people directly and also has 12,500 concession staff.