House of Fraser face another setback this week as they are forced to cancel thousands of customers orders and issue full refunds following a fall out with their warehouse operator, XPO Logistics. The Logistics firm have stopped processing orders for the High Street retailer following a row with the company over unpaid bills.
It has been a turbulent few months for the Retailer. The company had been on the verge of collapse, which would have caused 17,500 job losses across UK High streets, before a last minute buy out by Mike Ashley’s Sports Direct. The sports giants purchased House of Fraser for £90 million after they went into administration earlier this month. Since the buyout, the clothing store has been business as usual across their stores, with the exception of not accepting gift vouchers from shoppers,
XPO Logistics is ranked in the top ten of the largest transportation and logistics service providers in the world, they have been handling the warehousing and distribution for House of Fraser’s online orders and store deliveries from their site in Wellingborough since 2016. The Logistics provider have stopped processing the company’s orders following a dispute over unpaid invoices. The new owners of House of Fraser have stated they will not pay outstanding invoices for any services rendered before the take over as under the pre-pack administration deal in which House of Fraser was acquired, the purchases are able to discard existing pension liabilities and creditor claims.
It is believed XPO Logistics could be owed tens of millions of pounds by House of Fraser and they called on the new owners to clear some of the debt. The employees working in the Warehouse have been instructed to refuse deliveries and stop working on orders until a resolution can be found.
In a tweet to their customers, House of Fraser have advised they are refunding all customer orders that have not already been dispatched, and will be refunding their money.
The company website has been taken off line and replaced with a message claiming the website is currently undergoing maintenance. Neither House of Fraser nor XPO Logistics have released an official statement relating to the dispute, however with such a large amount of money in dispute it is likely to take some time to find a suitable resolution for both parties.
Institute of Supply Chain Management