Troubled UK retailer House of Fraser snapped up by sports chain

The front of the retail store House of Fraser is seen in central London on August 10, 2018. House of Fraser, the Chinese-owned UK department store chain, entered administration on August 10 only to be swiftly snapped up by retailer Sports Direct for £90 million ($115 million, 100 million euros). / AFP / Daniel LEAL-OLIVAS
Updated 10 August 2018
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Troubled UK retailer House of Fraser snapped up by sports chain

House of Fraser, the Chinese-owned UK department store chain, entered administration on Friday only to be swiftly snapped up by retailer Sports Direct for £90 million ($115 million).

The 169-year-old company joined a string of major British retailers who have fallen victim to fierce online competition, rising business rates and stretched household budgets amid Brexit uncertainty.

House of Fraser, which has department stores dotted across Britain and Ireland, currently employs about 17,500 staff — but 6,000 jobs were already on the chopping block in an overhaul that had been unveiled in June.

Shortly after it revealed it would be appointing administrators, Sports Direct announced it had acquired almost all the business and assets for £90 million.

“The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business,” the firm said in a statement to the London Stock Exchange.

Sports Direct owner Mike Ashley already had an 11 percent stake in the department store chain, and also has stakes in rivals such as Debenhams and French Connection.

House of Fraser, which had been controlled by the Chinese conglomerate Sanpower, had earlier announced the appointment of Ernst & Young as administrators.

Administration is the process whereby a troubled company calls upon independent manager in a bid to restructure the business and remain operational.
Joint administrator Alan Hudson said the sale “preserves as many of the jobs of House of Fraser’s employees as possible.”

“We hope that this will give the business the stable financial platform that it requires to flourish in the current retail environment,” he added.

House of Fraser revealed last week that it had lost a proposed investment from the Chinese owner of Hamleys and was looking for a new rescuer.
It had already said in June that it was shutting 31 of its 59 stores across Britain and Ireland.

The group had announced the drastic restructuring after agreeing a 51-percent sale to China’s C.banner International Holdings, which already owns the London toy retailer Hamleys, for £70 million.

However, C.banner said a slump in its own share price had rendered the transaction “impracticable and inadvisable,” and it axed the deal.

Sports Direct said in its statement that “for the year ended 28 January 2017..., the House of Fraser group had gross assets of £946.3 million and made £14.7 million net profit.”

British retailers with high numbers of stores are suffering from fierce online competition from the likes of Amazon, while battling against discounting in big supermarket chains.
The country is also experiencing weak household spending generally amid economic uncertainty generated by Britain’s looming EU departure in 2019.

“There’s no denying it’s a worrying time for retailers at the moment and some retail space most probably has no future,” said Maxine Vogt, analyst at research consultancy Euromonitor.

“However their fate is not sealed and we are still far from the ‘retail apocalypse’ many predicted at the end of last year.”

British budget chain Poundworld collapsed earlier this year with the loss of some 5,100 jobs.

Meanwhile, thousands of jobs have also gone with the demise of clothing outlet Calvetron, Toys ‘R’ Us toy chain, Maplin electronics stores and Warren Evans bed manufacturers.


Samsung announces folding phone with 5G — at nearly $2,000

Updated 21 February 2019
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Samsung announces folding phone with 5G — at nearly $2,000

  • The device looks similar to a conventional smartphone, but then opens like a book to reveal a display the size of a small tablet
  • Samsung is also making improvements to its flagship Galaxy S devices and plans to offer a 4G version of its folding phone
SAN FRANCISCO/LONDON: Samsung Electronics Co. Ltd. on Wednesday unveiled a nearly $2,000 folding smartphone in a bid to top the technology of Apple Inc. and Chinese rivals and reignite consumer interest amid slumping sales.
The Galaxy Fold will go on sale on April 26 and take advantage of new and faster 5G mobile networks. The device looks similar to a conventional smartphone, but then opens like a book to reveal a display the size of a small tablet at 7.3 inches (18.5 cm).
The device “answers skeptics who said that everything that could be done has been done,” DJ Koh, chief executive of Samsung Electronics, said at an event in San Francisco. “We are here to prove them wrong.”
Samsung remains the world’s largest smartphone maker with nearly a fifth of global unit sales but underperformed a slumping market last year. Chinese rival Huawei Technologies Co. Ltd. — whose Mate series of phones also command premium prices — gained market share. Other Chinese makers like Xiaomi Corp. have also been increasing prices, leaving Samsung to defend its turf against upstart rivals in addition to its longtime foe Apple.
With the foldable phone, Samsung is going on the offense on two fronts in the smartphone race: It is offering an eye-catching new feature with the big, bending screen and the first 5G connection in a premium phone, a feature analysts do not expect Apple to match until 2020.
Samsung is also making improvements to its flagship Galaxy S devices and plans to offer a 4G version of its folding phone.
It also challenges the notion of what a phone can cost, debuting at nearly twice the price of current top-of-the-line models from Apple and Samsung itself.
Patrick Moorhead, founder of Moor Insights & Strategy, said the new folding device could help Samsung stay at the top and lure consumers to upgrade devices that have looked largely the same over the past five years.
“Samsung and Apple go back and forth” to lead the premium smartphone market, Moorhead said. “I think this is Samsung’s chance to take back the innovation crown.”
And even though the $1,980 starting price is steep, some dedicated Samsung fans said they would pay it. Navneet Kumar Singh, a Samsung enthusiast from India who traveled to San Francisco to watch the launch, is ready to place his order.
“The prices of the flagship models have been a little aggressive in India,” he said, “But in the end, if you invest the money you’re getting a different experience.”
Samsung also introduced several accessories to compete against Apple, including a pair of wireless headphones called Galaxy Buds. The headphones include wireless charging, a feature that Apple has promised to put into is competing AirPods but has not yet released.
Samsung also said that its new Galaxy phones will be able to wirelessly charge its headphones and new smartwatches by setting the accessories on the back of the phone.

10 times faster
Along with the folding phone, Samsung also added new cameras and a 5G version to its Galaxy series of phones.
Verizon Communications Inc. will be the first carrier to offer service for Samsung’s 5G phones. The networks are expected to be 10 times faster than current ones, improving viewing of live news and sports events.
With the 5G versions of its flagships, the Korean electronics maker looks to have beaten Chinese rivals in the 5G race, although the device will operate only on the small number of networks launching later this year. Apple is not expected to release a 5G smartphone until late 2020.
The new networks are not available in many places yet but will roll out this year and next. Consumers who want to hold on to their phones for several years before upgrading may be tempted to buy a 5G phone now so that it will be able to take advantage of those networks later, said Bob O’Donnell of TECHnalysis Research. That could sway some Apple buyers over to Samsung and other Android makers with 5G devices.
“People are going to be thinking about, am going to be able to use this a year from now? Two years from now? Three years?” he said.
Rival smartphone makers are expected to announce 5G models at next week’s Mobile World Congress, the industry’s top annual event, in Spain. Samsung said its 5G handset would be available in the early summer.
The Galaxy 10 series needs to appeal to consumers who are reluctant to upgrade for only incremental technological improvements in performance.
All of the Galaxy series of rigid phones except the 5G will be available from March 8, with the S10+ priced from $1,000, the S10 priced from $900 and the smaller S10e from $750.
The mainline S10 compares with $999 for Apple’s iPhone XS and $858 for Huawei’s premium Mate 20 Pro.