48 HOURS TO SAVE HOUSE OF FRASER

Race on to bring top store back from brink – and keep 17,500 jobs

THE fate of House of Fraser will be decided in 48 hours with a battle under way to save the group from collapse.

Four City bidders last night filed last-ditch rescue plans to stop the department store chain from becoming the latest casualty in the fight to save our high streets. Possible buyers include Sports Direct owner Mike Ashley and the billionaire retail tycoon Philip Day – with a decision on their efforts expected within two days.

House of Fraser’s owners are scrabbling to find funding before a major bill needs to be paid in ten days’ time.

Without a white knight investor, the 169-year-old retailer is likely to go bust, putting 59 stores and 17,500 jobs at risk. Bosses had hoped to stave off disaster after years of declining sales by closing 31 shops – many of them decades-old outlets which dominated their high streets – and renegotiating rents on the remaining ones.

But this plan depended on getting a £70million cash injection from Chinese company C.banner, which earlier this month pulled out of the rescue deal amid financial problems of its own.

The move plunged House of Fraser – which started out as a drapery store in Glasgow, where the flagship shop remains – into a new crisis and sparked a frantic search for another benefactor.

The retailer issued a statement saying that discussions with creditors and possible backers were continuing.

Life-support must be secured by Monday, August 20, when concession holders are due to get a multi-millionpound payment from the business,

which it cannot at present afford. Industry experts believe that a collapse is increasingly likely.

Richard Lim, of consultant Retail Economics, said: ‘House of Fraser is in desperate need of a rescue deal.

‘Without it, it’s inevitable that the business will fall into administration. The deadline they’ve announced puts a line in the sand for when that must be done but it’s going to be incredibly difficult.

‘Department stores are incredibly hard to run and they’re battling against higher minimum wages, increased rents and rising business rates at a time when consumers have changed the way they spend their disposable income.

‘For an investor to come in at this late stage is looking less likely by the day.’

House of Fraser has been owned since 2014 by Chinese billionaire Yuan Yafei.

Critics believe that the chain has been treated more as a trophy asset than a viable business, starved of vital investment and left reliant on near-permanent cut-price offers to get shoppers through the doors.

Bosses still hope a rescue can be secured, with possible saviours thought to include Edinburgh Woollen Mill owner Philip Day and Mr Ashley’s firm Sports Direct.

They are seen as the front-runners, although investment firms Alteri and Endless are understood to also have submitted bids.

A decision on the plans is expected within 48 hours but even if a buyer is found, the deal could involve the company

‘Can’t afford rents or to buy stock’

being put into administration, which could allow it to ditch expensive burdens such as its pension scheme.

Although this had a £28.5million surplus as of January 30 last year, there are questions over whether a new owner would want to shoulder the responsibility of looking after the scheme.

Retail analyst Richard Hyman said: ‘Someone coming along and ploughing money in is going to want a return, and how’s that going to work?

‘It clearly isn’t able to afford its rents or to buy stock and I find it quite hard to imagine what anything that would be worthy of the name “rescue” would look like.

‘They’re looking at a stay of execution while assets are sold.’

He added: ‘It’s a moot point whether it’s now in the last chance saloon or the room beyond the last chance saloon.’

Meanwhile, the House of Fraser department store on Princes Street, Edinburgh, is to close earlier than expected, on September 15, after the landlord served notice to quit.

The retailer had named the former Binns shop at the bottom of Lothian Road as the only one of its four Scottish stores to face closure.

A statement said staff who wanted to remain could be accommodated at the Jenners store on Princes Street.

Jenners became part of the House of Fraser brand in 2005 in a deal worth tens of millions.

As well as the store in the capital, there is a Jenners branch at Loch Lomond Shores, in Balloch, Dunbartonshire.