House of Fraser could be closing around 30 stores
today May 21, 2018
House of Fraser’s attempts to stay afloat may involve the closure of half its UK stores, as it continues to struggle to revive sales and contain its debt pile.
The embattled department store chain could be looking at around 30 store closures if its CVA plans are backed by creditors and landlords, although the exact number has yet to be decided, reported The Telegraph.
The move would be a hard hit for the UK retail sector. House of Fraser employs 6,000 people and 11,500 concession staff across its 59 UK stores.
Its exact CVA strategy is set to be unveiled next month. The insolvency process is also being used by other popular UK chains including Mothercare and New Look to demand rent cuts and close stores in an effort to avoid falling into administration.
According to reports, House of Fraser is struggling to win backing from landlords due to the large size of its stores, which makes them more difficult to rent out quickly. This has been seen from the large number of big format stores previously occupied by collapsed department store BHS that have remained vacant for a long time, or have been only let out in sections.
Meanwhile, Chinese company C.Banner International has agreed to buy a 51% stake in the business, but the acquisition is conditional on House of Fraser restructuring its store portfolio. If House of Fraser manages to get its CVA approved, C.Banner will inject £70m of fresh capital into the ailing department store group.
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