Retail giant set to close
ALTRINCHAM HOUSE OF FRASER TO SHUT
DEPARTMENT store House of Fraser in Altrincham is set to close as the retailer’s Chinese owners finalise a restructuring proposal, it has been announced.
The group unveiled proposals to close 31 of its 59 leased stores across the UK and Ireland, saying its property portfolio was ‘unsustainable in its current form.’
But Manchester city centre’s House of Fraser store at the iconic Kendals building on Deansgate is not included in a full closure list published by the retailer’s owners.
Up to 2,000 jobs are at risk as part of the restructuring plan, which is being drawn up with the help of accountancy firm KPMG.
House of Fraser could also ask for rent reductions on a further 11 outlets, although none have been named. The store closures will be undertaken through Company Voluntary Agreements (CVAs), a controversial insolvency procedure in vogue among struggling retailers.
Landlords, who must vote through the plan, have already expressed serious concerns about the proposals and met on Tuesday to discuss how to respond to House of Fraser.
Property agency JLL has teamed up with lawyers at Begbies Traynor to unite both institutional and individual landlords and advise on a course of action on House of Fraser’s plans.
The 169-year-old firm confirmed today it filed in court yesterday proposals for CVA, saying the plans were ‘central to the significant restructuring of the business, without which House of Fraser does not have a viable future.’
The retailer said it anticipated stores scheduled for closure would remain open until early in 2019.
The Altrincham store is based off Stamford New Road within the Stamford Quarter shopping precinct.
House of Fraser said consultation on the CVA proposal would take place over the next 17 days.
Online and in-store trading will continue throughout the process.
Frank Slevin, chairman of House of Fraser, said: “Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.
“So while 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.”
The retailer’s board is trying to push through its restructuring plan while securing new investment from Hamleys owner C.banner, a Chinese fashion conglomerate based in Nanjing.
C.banner is being lined up to buy a 51 per cent stake in House of Fraser from the department store’s Chinese owner, Sanpower, and invest £70m into what remains of the business.