Edinburgh Woollen Mill Group (EWM) has pulled all of its stock from House of Fraser following an announcement yesterday that had closed it concessions.
According to Drapers, vans will be arriving as early as of September 5, 2018 to remove all EWM stock from House of Fraser’s entire store network.
House of Fraser currently stock numerous EWM concessions including Calvetron Brands, Jane Norman, Berwin & Berwin and Jaeger, and also uses EWM to manufacture its own branded goods which will also be pulled.
“The group has ended business with House of Fraser,” an EWM spokesperson told Drapers.“This decision was not taken lightly and follows a period of extended and sustained negotiations with House of Fraser.
“Our brands have a long history with House of Fraser, and we worked hard to try to secure a satisfactory arrangement. But, sadly we have not been able to agree future trading terms that give us confidence in the security and continuity of the House of Fraser business. We have been forced to close our concessions in House of Fraser, and are currently in the process of withdrawing stock. Berwin & Berwin will also no longer supply any House of Fraser own-brand menswear.We remain firmly open to discussions with House of Fraser, and hope they will engage with us.We have also received a firm guarantee from the top management of Sports Direct that all sales since the takeover will be paid in full on 10 September, and anticipate that that guarantee will be honoured.”
This follows news on September 3, 2018 that negotiations between EWM and House of Fraser’s new owner Sports Direct had broken down, leading it to instruct its concession staff to “ensure that no goods/products are sold” at any of its concessions.
In an email to staff EWM also told them to prepare for its stock being pulled, including instructions remove all confidential data from the premises and to pack stock by brand into boxes.
More pressure piled on Sports Direct shareholders ahead of AGM
Another influential advisory group has urged investors to reject key proposals at Sports Direct’s upcoming AGM, increasing the chances of chief executive Mike Ashley facing a shareholder revolt.
Shareholder advisory group Pirc came out strongly against Ashley, urging shareholders to vote against his re-appointment, as well as vote against the re-appointment of Keith Hellawell as chairman.
“Ashley’s position on the board and level of shareholding raises significant concerns about his influence on the board and whether the other directors can objectively challenge and influence the board’s decision making process,” Pirc said.
Pirc added: “It is important for the public shareholders to be confident about the board’s ability to represent their best interests and not those of the controlling shareholder.“This is no longer the case with the existing chairman and an oppose vote is therefore recommended.”
The firm also highlighted criticism from the Business, Innovation and Skills select committee which in a 2016 report into working practices at Sports Direct said: “He must be held accountable for some appalling working practices at both the Sports Direct shops and warehouses, either for not knowing about them, or for turning a blind eye to such practices.”
A Sport Direct spokesperson said: “We hope that shareholders will continue to recognise the further positive progress that we have made over the last 12 months.”
Influential advisory groups ISS and Glass Lewis have also urged shareholders to vote against the re-appointment of Ashley and Hellawell.
Ashley, who founded Sports Direct and is currently under pressure to turnaround House of Fraser’s fortunes after acquiring last month, was criticised by ISS for “continued failures” as the boss of retail giant.
ISS also said that Ashley had displayed an “apparent unwillingness” to listen to the concerns of Sports Direct’s independent shareholders.
Glass Lewis slammed Ashley for overseeing many years of “poor governance” at the retailer, adding that negative media stories against him have damaged Sports Direct’s public image.
It also pointed to the retailer’s “poor gender diversity practices”, arguing that Sports Direct does not have a meaningful board diversity policy or measurable gender objectives.