House of Fraser and Hamleys speak out on Icelandic crisis

House of Fraser chairman and Baugur shareholder Don McCarthy, issued a statement today in which he said: “I felt that it was again important to clarify the independence of House of Fraser from these issues and to emphasise that they have no impact on the strength of its business, its operations or its trading performance.”

He added that there is “no doubt” that Icelandic investor Baugur is “facing a difficult period” saying that it had been “unwillingly drawn into the Icelandic banking crisis and the unfortunate political repercussions between the Icelandic and UK Governments”.

“While we remain positive that the situation will be resolved, it is important to understand our distance from these events,” he said.

“House of Fraser is very confident of its broad and supportive shareholder structure and also of its debt position," he said.

He reiterated that the retailer is supported by a string of international banks, led by HBOS and with whom it has “a strong relationship”.

“We have repaid and/or cancelled over£110 million of the debt as a result of the financial strength of the company and its ability to generate strong cash flows,” he said.

McCarthy reassured House of Fraser staff and the retailer’s partners of the strength of its management team, its strategy and its confidence “in delivering continued development through this tough period”.

In an echo of sentiments expressed by Baugur chief executive Gunnar Sigurdsson over the weekend, McCarthy added: “In periods of economic change that everyone is facing at the moment, any lack of clarity and dangerous talk can only cause concern amongst the vast number of people employed in the retail industry.

In another statement issued today, Baugur-backed toy retailer Hamleys stressed that it is "a standalone, independent British company", not a Baugur subsidiary.

Any change in the ownership structure of Hamleys' shareholders would have no direct impact on it, the toy retailer said adding that it has no "banking, funding or other ties with any Icelandic banks".