House of Fraser £44m loss

HOUSE of Fraser has tumbled to a £44m loss as it prepares to close stores and plead with landlords for rent reductions.

The 169-year-old department store’s huge losses come after the £1.5m profit it made a year earlier.

Sales at House of Fraser fell 6.7pc in the year to the end of December 31, as it continued to be blighted by a consumer shift to online shopping. The firm also blamed a spate of terror attacks in London last year and fluctuating currencies for damaging its performance.

The results were published in a stock exchange announcement by Chinese retail group and Hamleys owner C Banner, which has just agreed to buy a controlling stake in House of Fraser.

But the purchase is conditional on the basis that House of Fraser agrees to close its least profitable stores and secures rent cuts. If creditors agree to the restructuring plan, called a company voluntary arrangement, then C Banner will plough fresh investment into the retailer.

It is thought that House of Fraser could be forced to close a third of its shops.

Established in 1849, it currently has 59 stores and employs 17,500 people. It was bought for £480m in 2014 by Chinese conglomerate Sanpower, which had planned a vast expansion of the retailer into China.

But so far only two shops have opened there.

The figures published by C Banner include the start-up and operating costs of House of Fraser’s first stores in China in 2016 and 2017.

But they do not cover the licence paid to House of Fraser’s UK business to use the name in China, or the sale of a number of its brands last year.