House of Fraser to close 31 stores
House of Fraser has made “one of the most important moves in its 169-year history”, filing in court proposals for Company Voluntary Arrangements (CVAs). This follows on from C.banner’s conditional agreement to acquire a 51% stake in House of Fraser Group and intention to introduce "significant" new capital.
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.
Catherine Shuttleworth, CEO at Savvy, comments: "This is devastating news as these stores play an important part not just for the employees but also for the towns and cities that this will effect. In many cases these stores have been a vital part of life in these High Streets for decades and will not be replaced.”
However, Frank Slevin, Chairman at House of Fraser, stresses an urgent need to adapt to a fast-changing retail landscape. “Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business,” he says. “So whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”
He adds: “We have had constructive dialogue with a number of key stakeholders to date, and we will continue this engagement over the next 17 days. Ultimately, it will be for individual creditors to decide how they will vote on the CVAs. We believe the proposal has sought to find a solution that is fair for all parties, enabling us to secure vital new capital from C.banner. Our immediate focus is on our colleagues with whom we are communicating openly and supporting at this time.”
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