House of Fraser is seeking rent cuts from landlords
UK department stores chain House of Fraser is seeking deals with landlords that would help it slash its rent bill, according to a news report Friday.
The report about the retailer, which is owned by Chinese conglomerate Sanpower, came just a day after department stores peer Debenhams had its own bad news. It had detailed tough times over the Christmas period and the two stories together paint a picture of a UK retail sector in distress.
Sky News said that HoF has written to landlords of an unknown number of its 59 UK stores requesting “substantial” rent reductions. And the news organisation said the company issued a statement on Friday evening confirming that it has “contacted some of our landlords asking for their support as we drive forward with our transformation programme."
The “informal” requests are reported to have been made in the past few weeks and will make the firm’s Christmas trading update that’s due in the next few days even more newsworthy.
It’s still unclear just how bad the Christmas trading season was for fashion retailers overall in Britain. While Debenhams was forced to make steep price cuts to boost sales, others appeared to fare better with Next pleasantly surprising the market. Some specialist chains have also reported a buoyant season, but companies tracking footfall and general sales have said that it wasn’t a great Christmas season.
There has been speculation for some time around HoF’s finances and late last year, ratings agency Moody’s called it a “very high credit risk”. It is unknown whether HoF has also considered store closures if it doesn’t achieve the rent reductions it wants.
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