House of Fraser chief executive Alex Williamson said making the “brutal and grim” decision to launch a company voluntary arrangement (CVA) was the only way the struggling retailer could fight for survival.
Following the announcement that HoF intends to shutter 31 of its UK stores, putting 6,000 jobs at risk, Williamson said there was no other option for the business.
“Without this restructuring House of Fraser would not be viable going forward. The scale and brutality of the decision was not something I or the senior team took lightly. It is really grim.
“Closing stores and the impact on employees and brand partners is challenging, emotional and regrettable. It is not a situation we wanted to imagine but there was no alternative.”
Williamson said the legacy property portfolio and leases rendered the business “unsustainable” and the “robust” store closure plan would ensure its future: “I know we are creating disruption but it is necessary to create the agility to be outstanding in the future. It is difficult to manage but it is our responsibility to be brave and robust. We have to do everything we can to be profitable and sustainable.”
He added: “We are applying the CVA exactly as intended. We can’t be confident the vote will go our way but we would be very disappointed if our stakeholders didn’t see the chance to take the business forward.”
Of the 6,000 potential job losses, 4,000 are concession partners.
Several suppliers told Drapers they were concerned about the knock-on effect of the CVA on their businesses.
Williamson said he was confident of their continued support: “We have spent a huge amount of time taking to our brand and concession partners, and at least we can give them clarity now. We are comforted by their ongoing belief in House of Fraser as a brand. Our focus needs to be on building a house of premium brands, and we are confident of the support of key brand partners going forward.”