House of Fraser is preparing to shut half its stores – largely those on the High Street – in a drastic attempt to save the business.
As many as 29 of its 59 shops are earmarked for closure with many of its famous stores to shut, insiders claim.
Those being kept open under the restructuring plan, which is set to be announced by the firm’s Chinese owners today, will be mostly in more modern, large-scale shopping centres.
As many as 29 of House of Fraser’s 59 shops are earmarked for closure with many of its famous stores to shut, insiders claim.
It means its famous department store Frasers in Glasgow, where the business was founded 169 years ago, and the site in Oxford Street could both close.
And it underlines the crisis which is currently engulfing the High Street.
It is predicted more than 10,000 shops will disappear this year – the most in a decade.
Toys R Us and Maplin have collapsed into administration and Marks & Spencer, Mothercare, Carpetright and New Look are all closing shops. Analysts warned the crisis will likely continue.
House of Fraser is racing to agree a rescue plan with landlords and other creditors, which is expected to be announced today.
It is trying to push through a controversial restructuring process called a company voluntary arrangement, which will allow it to close stores and get rent reductions on others.
By the numbers
- 1849 House of Fraser opened in Glasgow as Arthur and Fraser
- 17,000 employees at its 59 stores and concessions
- £44m loss last year from a profit of £1.5m ayear earlier
- £480m what Chinese firm Sanpower paid for House of Fraser in 2014
However, landlords are not thought to be supportive of the plan and have called it ‘highly insensitive’. Landlord groups have accused retailers of ‘abusing’ company voluntary arrangements and using them ‘solely to reduce rental liabilities’. House of Fraser needs 70 per cent of its creditors – including landlords – to back its plan.
The department store chain needs to seal the deal so it can access £70million in funding pledged by a new investor.
The Chinese owner of Hamleys, C. Banner, has made access to the funds conditional on a restructuring deal being done.
Failure could see House of Fraser plunged into administration, putting the jobs of 17,000 staff at risk. Even if a deal is approved, C.
Banner is expected to wait two months to see how the pared back group fares until granting House of Fraser the cash.
A spokesman for House of Fraser said: ‘As we highlighted over the weekend we are on track with our plans to propose a CVA.’