More retail pain
House of Fraser is set to close 31 of its 59 stores as part of the struggling retailer’s restructuring plan.
The rescue deal will affect 6,000 plans including 2,000 House of Fraser jobs and 4,000 brand and concession roles.
Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVAs, said “The CVAs proposed by House of Fraser give the business a vital lifeline to avoid administration by renegotiating the lease terms of its UK-wide property portfolio, as part of a wider restructuring.
“The business has been impacted by the mounting pressures facing the UK high street, with the declining profitability of certain stores exacerbated by costly legacy leases which were originally negotiated many years ago. With trading conditions unlikely to materially improve in the short term, the future of House of Fraser is at significant risk unless steps to restructure the business both financially and operationally are taken.”
Rob Croxen, restructuring partner at KPMG and second proposed supervisor of the CVAs, added: “House of Fraser currently operates 59 leased stores across the UK and Ireland, although two stores are excluded from the CVA proposals, one store in Ireland and another held by a separate legal entity. Company Voluntary Arrangements are being proposed by two entities, House of Fraser (Stores) Limited and House of Fraser Limited, which will divide the 57 store portfolio included in this proposal into three categories.”