House of Fraser has proposed the closure of 31 stores through a CVA, details of which have now been revealed.
The company said that the closures, including that of its Oxford Street flagship, were “central” to a restructuring and its property portfolio was “unsustainable in its current form”.
The department store group has 59 leased stores in the UK and Ireland, and intends to reduce that to 28.
As part of the CVA, House of Fraser also intends to relocate its head office from London’s Baker Street and its Granite House office in Glasgow to further reduce costs.
House of Fraser said it has has held ”constructive initial discussions with landlords and other key stakeholders” and, “pending approval of the CVAs, it is anticipated that those stores scheduled for closure will remain open until early in 2019”.
The stores proposed for closure
- Edinburgh Frasers
- High Wycombe
- Leamington Spa
- London Oxford Street
- London King William Street
- Milton Keynes
A consultation on the CVA plans will take place over the next fortnight and creditor approval sought on June 22.
If the CVA goes ahead, it will trigger the acquisition by Chinese investor C.banner of a 51% stake in House of Fraser Group Ltd and the associated injection of ”significant new capital”.
Approximately 6,000 staff directly employed by House of Fraser and its concession partners will be affected by the restructuring.
House of Fraser chairman Frank Slevin 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.”
House of Fraser chief executive Alex Williamson 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.
“I would like to offer my heartfelt thanks to all my colleagues at House of Fraser for working tirelessly throughout this difficult period. We are fully commited to supporting those personally affected by the proposals.”
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House of Fraser plans 31 store closures as CVA unveiled