XPO Logistics remains in a standoff with the new owner of House of Fraser, with the department store group’s supply chain paralysed as a consequence.
The logistics firm is owed £30.4m as a creditor of the retailer, which was placed into administration on 10 August and saw most of its assets sold to Mike Ashley’s Sports Direct shortly after.
While the sale price of £90m was eye-catching, the money will be used to settle debts with secured creditors.
Under insolvency law Sports Direct is under no obligation to settle the £484m owed to unsecured creditors of the business in administration such as XPO Logistics.
A source close to Sports Direct told MT that the new owners were “extremely frustrated” by XPO Logistics’ stance and had expected far more engagement. “It feels like we are being held to ransom,” they said.
XPO Logistics has declined to comment on the matter. The operator is the main distributor to House of Fraser and operated e-fulfilment services for the chain from Milton Keynes and Wellingborough too.
House of Fraser has been forced to take down its website and refund customer orders since the dispute arose at the point of administration.
Separately, the GMB union has warned that more than 600 workers at the XPO Logistics sites serving House of Fraser are now at risk of redundancy.
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