Fraser axes three stores

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House of Fraser, the department store group, is to close three stores in the North of England with the loss of 250 jobs .

The Binns stores in South Shields, Tyne and Wear, and Bridlington, Humberside, and the Rackhams store in Bradford will close at the end of April. The announcement follows House of Fraser's decision last August to close its Binns branch in Newcastle.

The company said the branches were poor performers that would have required extensive investment. The closures will result in a £2m charge in the full-year results, due in March.

House of Fraser's strategy is to concentrate on larger stores and the group does not rule out the closure of other outlets. It said it would continue to serve the North-east through its stores at the Metro Centre in Gateshead and Binns stores in Darlington and Middlesbrough.

The latest moves were announced as House of Fraser issued a disappointing trading statement showing sales over the Christmas period had been sluggish until the final week and that the early impetus of the January sales had tailed off. Overall, sales in the six weeks before Christmas were 10 per cent higher than a year earlier.

Richard Scott, finance director, blamed the warm weather in early December for price-cutting by rivals in seasonal items such as winter coats. The company warned that this had contributed to an erosion in profit margins that would affect its full-year results.

House of Fraser shares slipped 3p to 167p, 13p below the 180p issue price when the company was floated last February. Morgan Stanley said it had expected the closures but was disappointed by the margin reduction. The broker yesterday reduced its profit forecast from £43.5m to £37.5m for the year.

Mr Scott shrugged off the City's reaction, saying: "We always said it would be a three-year exercise to get this company to where it ought to be."

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