House of Fraser to close 31 stores

by XPRESS, 07 June 2018

If the plan is approved, 2,000 House of Fraser jobs will go, along with 4,000 brand and concession roles.

The stores scheduled for closure, which include its flagship London Oxford Street store, will stay open until early 2019, House of Fraser said.

The retailer needs the approval of 75% of its creditors to go ahead.

Creditors will vote on the insolvency plan, which involves company voluntary arrangements (CVAs), on 22 June.

In May, House of Fraser's Chinese owners Nanjing Cenbest reached a conditional agreement to sell a 51% stake to the Chinese owner of Hamley's, C.banner. The sale is conditional on the restructuring plan being approved.

House of Fraser chairman Frank Slevin said the retail industry was undergoing "fundamental change", and the company "urgently needs to adapt".

"Our legacy store estate has created an unsustainable cost base which, without restructuring, presents an existential threat to the business."

Closing stores was "a very difficult decision", he said, but "it is absolutely necessary if we are to continue to trade and be competitive"

Accountancy firm KPMG, which is overseeing the insolvency process, said the firm had been hit by "mounting pressures facing the UK High Street".

In addition to the store closures, the department store chain is seeking to cut rents by 25% on 10 of the stores it is keeping open.

Of the 31 stores it wants to shut, it is seeking a 70% rent reduction for seven months, after which the stores will close.

House of Fraser has been living hand to mouth for months. Axing half its stores is a drastic attempt to save the business from collapse.

This is a chain that's had more than its fair share of financial ups and downs over the decades, with a colourful array of owners. But the chain has gradually lost its relevance and suffered from a lack of investment.

It's been struggling for a long time. And in the last year, the increasingly tough conditions on the High Street has exposed its weaknesses, with the result that its problems have finally come to a head.

Even with these store closures, House of Fraser still need to have the right products and experience to pull shoppers into the stores that will be left.

Article credit: BBC News