Change at top after House of Fraser takeover

Matalan boss John King was named chief executive of House of Fraser today after the department store chain changed hands in a £351m (€523.4m) deal.

The Baugur-led consortium Highland Acquisitions announced that Mr King will join the company early next year as replacement for John Coleman, who stepped down as chief executive after completion of the takeover today.

Mr King joined Matalan in 2003 and has more than 20 years' experience in retail and manufacturing.

He was appointed today alongside executive chairman Don McCarthy, who set up the Shoe Studio Group in 1991.

Mr Coleman told staff today: “It has been a privilege to lead House of Fraser since 1996 and I am proud of the business we have created as Britain’s leading retailer of designer brands.

“Our success in doubling our profits over that period is down to the hard work, commitment and dedication of all of you and your colleagues around the business.”

According to reports, Mr Coleman is set to receive at least £515,572 (€768,800) in compensation on top of a £1.7m (€2.5m) payout from the vesting of long-term investment plan shares. He will also get up to £4.7m (€7m) in cash from shares he already owns.

Mr McCarthy replaces Michael Wemms as chairman. He also led the successful management buyout of the Shoe Studio from Nine West in 2001.

Baugur’s acquisition of Fraser is its biggest in the UK to date and takes the turnover of companies in which it is a major shareholder towards £10bn (€14.9bn).

It follows the takeover of clothing chains Whistles and Karen Millen along with tea and coffee maker Whittard of Chelsea. Baugur’s empire also includes royal jeweller Mappin & Webb, Hamleys and food retailers Iceland and Booker.

In October, House of Fraser said investment in the business, including through the acquisition of Jenners and Beatties, caused losses for the half-year period to reach £9.3m (€13.9m), against £4.4m (€6.6m) a year earlier.

Further one-off accounting items pushed the bottom-line figure to £11.6m (€17.3m), against £3.1m (€4.6m) in 2005.

Fraser began in 1941 as the drapery business Fraser, Sons & Co in Glasgow.

During the 1970s it expanded rapidly with the acquisitions of drapers across Scotland, Ireland and England and department stores such as Hide & Co in Kingston-upon-Thames and Army & Navy Stores in London.