Beleaguered British department store House of Fraser is cancelling all online orders and will be refunding thousands of customers potentially millions of pounds after a dispute with its warehouse operator held up deliveries.
The decision comes “after the chain's website was taken offline amid complaints from customers about delayed deliveries since the company was bought by Sports Direct for £90m last week”, says Sky News.
XPO logistics, which operates a House of Fraser distribution centre in Wellingborough, “has told employees to stop accepting orders from the department store”, reports The Times.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
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.
But XPO has halted work as it tries to convince Sports Direct to honour existing contract terms.
“We have taken the decision to cancel and refund all orders that have not already been sent to customers,” the department store said on Facebook.
“We didn't take this decision lightly, but since we cannot give our customers clear assurances of when their orders will be delivered, we believe cancellation is the best option.”
A source close to Sports Direct told The Guardian it had been forced to cancel orders as XPO was being “totally unreasonable in terms of their demands” and was “refusing to engage in any process” which would “move the situation forward”.
“XPO is trying to hold us to ransom,” the source said.
Sports Direct “has no legal obligation to pay suppliers money owed before its buyout as their debts were part of the administration”, adds the paper, but new owners “often agree to settle at least some of the debts in the interest of good relations”.
The announcement that online orders have been cancelled “has caused anger among customers”, says the BBC.
The broadcaster quotes one Twitter user who wrote: “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”.
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.