House of Fraser is to close stores as part of restructuring deals

House of Fraser to close stores, potentially putting hundreds of jobs at risk in the transaction restructuring that will give control over the retail network on the Chinese owner of Hamley.

C. banner buys 51% stake in the parent group, the ailing Department store group. The purchase will include the acquisition of shares from Nanjing Cenbest, part of a conglomerate Sanpower of China, which will retain a minority stake.

House of Fraser to push the Chinese luxury goods in the UK

Read more

C. banner has also agreed to pay a further £70 million of new shares, leading to a “significant capital injection” in house of Fraser. That comes on top of £25m of funds pumped into the company’s shareholders in March of this year.

The transaction is subject house of Fraser closing an unknown number of its 59 stores and rent review with the landlord company voluntary arrangement (CVA) insolvency proceedings , which is expected to be launched in June.

Industry experts have suggested that house of Fraser will have to consider closing at least 20 sites. The group is already in talks with landlords as part of plans to reduce its area by 30% by reducing the number of outlets. It is clear that the deal was struck to cut stores in cities including Plymouth and Wolverhampton.

A quick guide to the health of UK retail at

Show

Hide

Stores that went bankrupt 2017-18

Toys R us: 180 shops are 3,000 employees, collapsed on 28 February. Owe 15 million pounds in VAT, in connection with the 1 March.

Workshop: 200 electronics and gadgets stores, established in 1972, also failed on 28 Feb.

Warren Evans: the manufacturer went into administration in early February.

East: a fashion brand with nearly 50 outlets, folded in January.

Juice case: history of brands, including Elizabeth Emanuel and Joe Bloggs went in January.

Multiyork: furniture chain with 50 stores went into administration in November.

Feather & black: bedroom furniture and bedding specialist with 25 points fell into administration in November.

Retailers under pressure

New look has debts of more than 1 billion pounds and has lost some of its credit insurance which protects suppliers if the seller is bankrupt. For 10 months before Christmas, sales fell by 11%, but losses hit £123m height. The company intends to close 60 stores and change its ranges of fashion, but faces struggle to win back young buyers.

House of Fraserwith the Chinese owner, Sanpower, had to stump up £ 25 million to see the store at Christmas and its debt is estimated as undesirable. The retailer is trying to reduce the size of its stores by 30% and asked landlords to cut rents.

The Debenhamsin the 178-store chain, for over 200 years, to kill one of the four leaders and with account closures to cut costs. He warned that revenues were lower than expected level of sales, profits also declined as a result of having to reduce prices to match competitors.

Photo: Tony Margiocchi / Barcroft Images/Barcroft media

Was this helpful?

Thank you for your feedback.

Closures can lead to hundreds of job losses in the 169-year-old Department store chain, which employs 5,000 people directly, and another 12,500 people in the benefits for fashion brands, including French connection, phase eight and Ted Baker.

Loss major shopping tenants will also be a serious blow to the high street never recovered from the collapse of the toys R us in the workshop, and closing 60 new look stores-saving restructuring. Plans website carpetright to close 92 stores and lines plan to close dozens of outlets as fighting for survival.

The switch to online shopping hits all retailers, but Department stores find it particularly difficult to adapt because there are few alternative tenants for large stores, the majority of which are tied into long leases.

In the United States, hundreds of stores closed last year, while in the UK the black hole collapsed in 2016, after several years of difficulties. The Debenhams closed two stores and has announced plans to close up to eight. He also wants to find new uses for redundant space, such as gyms, restaurants and hot offices.

“In CVA on house of Fraser seemed inevitable for some time as the transition to online sales leads to a number of stores becomes unprofitable,” said Patrick O’brien, analyst at globaldata, said. “If he can get a more realistic rents and get rid of the weak, with investment in private ranges, and the decor store has all chances for a normal future.”

House of Fraser said that the restructuring would “provide business with an efficient platform for further growth”.

Subscribe for daily business today email or follow the business Guardian on Twitter @BusinessDes

Under the deal, Sanpower and S. banner will be a co-owner of the holding company, which controls 89% stake in house of Fraser. Sports direct boss, Mike Ashley controls another 11%.

Investment in house of Fraser is an important step in investing in the UK, the Hong Kong-listed C. banner, whose Chairman, Chen yixi, is the brother-in-law yuan yafey, the billionaire Chairman of Sanpower.

C. banner specializiruetsya on women’s footwear under the trademarks, including the Mio and the Sundance bought Hamleys in 2015, an estimated 100 million pounds.

Frank Slevin, house of Fraser, the Chairman, said that the investment with the banner was “a vote of confidence in our prospects”.

Said Slevin management, headed by Alex Williamson on “significant progress” on the turn, but added: “we need to go further and faster if we want to confront seismic shifts in the industry. You need to create a more flexible business that better serves the rapidly changing behaviour of a client base that, more and more shops agnostically channel”.

However, house of Fraser is facing a potentially rocky ride in the completion of its restructuring plans, according to the British Federation of real estate. Ian Fletcher, Director of the real estate policy, said that the negotiations with landlords are likely to be “clumsy and any support for the CVA to spare”, as the company did not consult with them before going public.

Business Credit Report #BusinessCreditReport Home