House of Fraser, the struggling department store group, is to sell three stores and cut 1,000 jobs in a radical overhaul. John Coleman, who took over as chief executive last year, said there would be no more store sales but would not rule out any further job losses.
"We can categorically say that we will not be selling or closing any more stores.
"But on jobs this is the first stage of the review which covered management and administrative areas. We now move on to phase two."
The group's overhaul will result House of Fraser taking a pounds 50m charge against this year's accounts. The provisions, which also include heavy stock write-offs, will push it deep into the red this year.
The three stores that will be sold are the Army & Navy in Eastbourne, the House of Fraser in Sheffield and the Binns store in Scunthorpe. Though buyers will be sought for the stores it is possible that they will be closed. This would lead to another 300 redundancies.
The breakdown of the provisions is pounds 22m-pounds 25m for stock write-offs, pounds 12m- pounds 15m for the job losses and a further pounds 7m-pounds 9m for asset write downs and related costs.
With the City forecasting pre-exceptional profits of pounds 14m for House of Fraser this year, the charges will push the group to a loss of up to pounds 35m.
The group says the restructuring will lead to annual cost savings of pounds 10m.
Commenting on the overhaul, Mr Coleman said it would improve efficiency and trading performance.
"All elements of our strategic review are proceeding on schedule and I expect 1997 to be a year of real progress for House of Fraser."
House of Fraser has store openings planned for Nottingham, Reading, Solihull and Bluewater in Kent over the next three years. It is likely that they will all carry the House of Fraser name.
The group also announced its Christmas trading statement yesterday. It showed that like-for-like sales in the 26 weeks to 25 January were 6.1 per cent higher than the previous year. This included a strong performance just before Christmas and during the January sales. Own-bought merchandise delivered only pedestrian sales growth of 3.9 per cent. Concessions sales were 10.8 per cent higher.
House of Fraser shares, which were floated at 180p, closed unchanged at 142p yesterday.
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