House of Fraser landlords could derail turnaround bid
House of Fraser’s landlords could mount a legal challenge against the retailer’s restructuring plans.
Last week, it made “one of the most important moves in its 169-year history”, filing in court proposals for Company Voluntary Arrangements (CVAs). This followed on from C.banner’s conditional agreement to acquire a 51% stake in House of Fraser Group and intention to introduce "significant" new capital.
Also of interest: Under pressure House of Fraser must up online game, GlobalData
Currently, the retailer operates an "unsustainable" 59 leased stores across the UK and Ireland. It has identified 31 stores for closure and also proposes to relocate the Baker Street head office and the Granite House office in Glasgow to new locations. The plans will affect up to 2,000 colleagues and a further 4,000 brand and concession partners.
A landlords source told the Sunday Express: “This follows the pattern of recent CVAs, which were all very unsatisfactory. We are seriously looking at going to lawyers to challenge the clauses [in the restructuring deal]. The group message is that landlords are prepared to look at a CVA if it is a proper restructuring, but they are not prepared to be the only loser in this.”
Sign up for our free retail technology newsletter here.