[H]ouse of Fraser is to close 31 of its 59 stores, including Carlisle, as part of a rescue deal.
The department store chain today confirmed it has filed proposals for Company Voluntary Arrangements (CVAs) in respect of House of Fraser (Stores) Limited and House of Fraser Limited.
These proposals are central to the significant restructuring of the business, without which House of Fraser does not believe it has a viable future.
Currently, House of Fraser operates 59 leased stores across the UK and Ireland and its property portfolio is unsustainable in its current form. Following a comprehensive review of the group’s entire property portfolio, the directors of the companies have identified 31 stores for closure which will reduce the total store estate to 28 stores.
As part of this CVA process, the company also proposes to relocate its Baker Street head office and Granite House office in Glasgow to new locations. This will help to reduce costs and secure House of Fraser’s future.
The company has held constructive initial discussions with landlords and other key stakeholders.
Pending approval of the CVAs, it is anticipated that those stores scheduled for closure will remain open until early in 2019.
This process will affect a significant number of staff in the affected locations. Those impacted by the changes have already been informed of the proposed changes.
Commenting on the CVA proposals, Frank Slevin, Chairman of House of Fraser said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive. Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business. 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.
“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.”
House of Fraser stores identified for potential closure under the CVA proposals:
London – City
London – Oxford Street