House of Fraser plans to close 31 of its stores, including its Oxford Street branch, as part of a restructuring effort.
The closures, which are due to happen by early 2019 and will affect more than half of the company’s 59 stores, will put 6,000 jobs at risk.
The department store was recently taken over by China’s C.banner, which bought a 51 per cent stake in the group from previous owner Nanjing Cenbest, in a deal which was contingent on House of Fraser entering a company voluntary arrangement to sort out its debt problems.
The group said the costs of running its store network had become “unsustainable”, and closing branches was a necessary step in order to continue operating.
As part of the CVA, the chain will also be seeking slashed rents on its remaining branches.
Frank Slevin, chairman of House of Fraser, said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.
“Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business. So whilst 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.”
Alex Williamson, the retailer’s chief executive, said: “Today’s announcement is one of the most important in this company’s 169-year history. We, as a management team, have a responsibility to take necessary steps to ensure House of Fraser’s survival, which is why we are making these proposals.”
Creditors will vote on the CVA on 22 June, and the company said until the vote takes place, it will continue to trade as normal through its stores and online.
House of Fraser is the latest in a long line of British retailers seeking to use CVAs to stay afloat while dealing with financial problems. In the past week, Mothercare has confirmed 50 store closures under a CVA, while Italian restaurant chain Carluccio’s announced it plans to shut up to 30 branches.
House of Fraser said the following stores are set to close: Altrincham, Aylesbury, Birkenhead, Birmingham, Bournemouth, Camberley, Cardiff, Carlisle, Chichester, Cirencester, Cwmbran, Darlington, Doncaster, Edinburgh Frasers, Epsom, Grimsby, High Wycombe, Hull, Leamington Spa, Lincoln, London Oxford Street, London King Willam Street, Middlesbrough, Milton Keynes, Plymouth, Shrewsbury, Skipton, Swindon, Telford, Wolverhampton, Worcester.
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