Sports Direct has bought House of Fraser in a £90m rescue deal after it went into administration. Legally it is a new owner, with no formal obligation to honour deals with previous customers and suppliers.
Stores remain open and trading as usual and the website is taking orders. So what does the takeover mean for people waiting for deliveries, those holding gift cards and vouchers, or wanting to return goods?
I’ve got furniture on order. Will it be delivered?
Callers to House of Fraser’s customer contact centre are being reassured that “everything will stay exactly the same”. Staff said they were told on Friday to tell customers that if they had placed an order it would still be delivered on the specified date. Don’t panic, was the message.
However, there is no specific guarantee from the new owner just yet. Neither the administrators, Ernst & Young, nor the buyer, Sports Direct, the sportswear chain controlled by Mike Ashley, have officially said what will happen about fulfilling existing orders. Sports Direct has acquired the brand, the stores and all the stock under the deal, which secures 17,000 jobs for the time being. The stores remain open and after a brief closure on Friday, the website was open and taking orders.
The Which? consumer rights expert Adam French said: “This sale should not have any negative impact on House of Fraser customers, so we want to see the company honouring its existing obligations to them. That means accepting gift vouchers, fulfilling online shopping orders and processing returns and refunds as if nothing has changed.”
I have a gift card. Will I still be able to use it?
It’s probably best to spend it soon. If a retailer folds, then customers who hold vouchers or gift cards are effectively creditors of the old business. They are entitled to their money back if there’s enough cash to pay them when the business’s assets are sold by the administrator. House of Fraser’s swift sale to Sports Direct probably means that the vouchers are likely to be honoured. But note what happened when Comet went bust. Initially, it said gift cards and vouchers would not be accepted, then changed its mind. A few months later, the stores all shut, so the cards were useless again. So it’s probably best to spend your House of Fraser vouchers soon.
What if I want to return something I bought a while ago. How are my rights affected?
The standard position under the 2015 Consumer Rights Act is that if you bought something in the store and it is faulty then you are entitled to a full refund within 30 days. After that, the retailer is supposed to offer a repair or replacement, or a partial refund. Again, House of Fraser’s customer contact team have been telling people that their return rights remain the same. But it would be better to act now rather than later.
Can I make a claim using the protections on my credit card?
The Consumer Credit Act allows you to hold the credit card provider jointly liable with the retailer for anything you bought, provided the item cost between £100 and £30,000. You should always use a credit card when buying items in this price range as it means you can make a claim if the retailer goes out of business or disappears. Again, there is no indication right now that House of Fraser’s new owners will not honour past orders, but at least if you bought by credit card you have rights you can enforce.