House of Fraser has confirmed it has filed proposals for Company Voluntary Arrangements (CVAs) in respect of House of Fraser Stores and House of Fraser Limited. The proposal of the CVAs follows the announcement of C.banner International Holdings conditional agreement to acquire a 51% stake in House of Fraser Group and intention to introduce significant new capital.
The company have identified 31 stores for closure which will reduce the total store estate to 28 stores. The move is expected to 6,000 jobs, including 4,000 brand and concession roles. As part of this CVA process, the company also proposes to relocate its Baker Street head office and Granite House office in Glasgow to new locations. This will help to reduce costs and secure House of Fraser’s future.
Pending approval of the CVAs, it is anticipated that stores scheduled for closure will remain open until early in 2019.
Commenting on the CVA proposals, 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. We have had a constructive dialogue with a number of key stakeholders to date, and we will continue this engagement over the next 17 days. Ultimately, it will be for individual creditors to decide how they will vote on the CVAs. We believe the proposal has sought to find a solution that is fair for all parties, enabling us to secure vital new capital from C.banner. Our immediate focus is on our colleagues with whom we are communicating openly and supporting at this time.”