Hope for House of Fraser after deal with landlords

Scottish legal action halted as both parties reach agreement

Under pressure department store chain House of Fraser has settled a legal challenge from landlords over plans to close 31 of its 59 stores next year.

The agreement – the terms of which were not disclosed – removes one obstacle as the group seeks a rescue deal.

The company’s store closure programme was announced in June but soon thrown off course when landlords issued a legal challenge, saying they were unfairly prejudiced by the process.

Creditors for House of Fraser approved the company voluntary arrangement (CVA), but landlords had started legal action to block the move in the Scottish courts .

A spokesperson for the Joint Supervisors of the House of Fraser CVAs said: “The Joint Supervisors can confirm there has been a settlement to the legal challenge to the House of Fraser CVAs.

“This commercial settlement has been reached to avoid the costs of litigation, and allows the companies to continue its investment process without the CVAs being subject to the risk of further legal proceedings.”

House of Fraser is one of a number of high street stores to seek a controversial CVA arrangement amid a rise in closures and failures.

Retailers have been hit by inflation, soaring business rates and falling consumer confidence with high profile victims including Toys R Us and Maplin.

House of Fraser is seeking a rescue package to stay afloat.