House of Fraser has said it will cancel all online orders and refund customers after a dispute with its warehouse operator meant deliveries were delayed.
It follows an outcry from customers who had not received goods ordered online.
Its warehouse operator, XPO Logistics, stopped processing orders late last week because of a payment dispute.
House of Fraser has told over 1,000 suppliers it will not pay money owed before 10 August, when Sports Direct bought the chain out of administration.
On Wednesday, House of Fraser was forced to take its website down as deliveries began to back up.
A message on the site says the firm is “working hard to make some improvements to the website”.
The announcement that online orders have been cancelled has caused anger among customers.
One said on Twitter: “Absolutely disgraceful. Ordered a £90 purse last Thursday. Yes a week ago for my daughters birthday. Not 1 email concerning delivery or info and now order cancelled and you say email in a few days!!! Get my money back ASAP”
Another said two-thirds of their husband’s suit would not now be delivered.
They tweeted: “This was for our holidays! I don’t have time to go back to Edinburgh with the trousers which are now totally useless! What do you suggest I do!”
Retail analyst Richard Lim, chief executive at Retail Economics, said there were “kinks to be ironed out” when there were changes of ownership and management at such a large operation as House of Fraser.
What will happen to my House of Fraser online order?
In terms of customers, if anyone has an order in where the stock is available, they still have a good chance of receiving it.
The firm is in the process of emailing customers over the next two days to formally cancel pending orders and arrange a full refund.
Those seeking to return existing purchases will have their statutory rights honoured.
If you have a store card then customers are being asked to write to Gift Cards, 27 Baker Street, London, W1U 8AH
It will be replaced by one of equivalent value for use in future House of Fraser stores (but not in Sports Direct stores).
He added: “But trust and loyalty are hard-won in retail. You would have thought that delivering a great service to customers would have been a priority for the company.
“Delivering goods into the hands of customers now has to be the top priority going forward.”
XPO operates two warehouses, in Northamptonshire and Buckinghamshire, that handle all of House of Fraser’s deliveries to customers as well as to stores.
It is among a number of suppliers to have taken action as negotiations over payment continue with the department store chain.
According to reports, fashion brands Jigsaw and Karen Millen have removed some stock from their House of Fraser concessions.
Sports Direct is not legally obliged to pay suppliers money owed before its £90m buyout as their debts were part of the administration.
Mr Lim says: “It is a complex situation, with lots of suppliers.
“The fact that suppliers will not get paid money owed prior to 10 August is not a great surprise. The sum he paid for House of Fraser would have priced in that situation.”
However, businessman Philip Day, who also wanted to buy House of Fraser, has said Mr Ashley should pay suppliers – who are said to be owed £70m – “in full”.
Sports Direct, which bought the chain just hours after it went bust, has said it wants to “restore the right level of ongoing relationships” with its brands.
Owner Mike Ashley has also vowed to keep open the bulk of the 59 House of Fraser stores.
Sports Direct already held an 11% stake in the group, which had been intending to close 31 shops under a now-abandoned restructuring plan.
Meanwhile, administrator EY has said there were six bidders for House of Fraser, with four of them – offering between £40m and £49m – being dismissed for various reasons.
This left two potential names in the frame, with one of the remaining pair offering £1 to acquire the group on a solvent basis.
This party then later proposed to acquire the business and assets following any insolvency for £100m – £10m more than what Sports Direct ultimately paid – before withdrawing their interest.
Also, EY said there was “no prospect of any funds becoming available to unsecured creditors of either of the companies” House of Fraser Limited or House of Fraser stores.
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