6,000 jobs go as House of Fraser’s rents are cut

AS MANY as 6,000 jobs will be lost at House of Fraser after it secured approval for a restructuring deal that will close half its stores.

The 169-year-old department store chain will close 31 of its 59 shops and get rent reductions on ten others.

House of Fraser managed to get the deal – called a company voluntary arrangement (CVA) – approved by creditors despite landlords being unhappy with the proposals. If the firm had failed it would have faced administration, threatening 12,500 jobs. The deal will mean C.banner, the Chinese owner of toy shop Hamleys, will take a 51pc stake in House of Fraser and give it £70m in funding. However, landlords warned that they could mount a legal challenge against the department store. Consultants Begbies Traynor and Jll, which advised landlords through the process, said: ‘It is disappointing that the CVA has been agreed without proper engagement with the landlords, many of whom manage the pensions and investments of the man in the street, despite them having so much at stake through the process.

‘The landlords now have a 28day window to consider whether to make a legal challenge against the process, and will be looking at their options closely.’

Frank Slevin, chairman of House of Fraser, called the vote ‘a seminal moment in House of Fraser’s history’.

‘This is also an important milestone in the transaction with C.banner,’ he said.