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House of Fraser CVA revealed

House of Fraser proposes to close 31 of its 59 stores, affecting 6,000 staff, in its company voluntary arrangement (CVA) filed yesterday.

The stores include the House of Fraser flagship on London’s Oxford Street.

The CVA terms were a condition of the proposed purchase of a 51% stake in the company by Chinese fashion conglomerate C Banner, which HoF said would introduce “significant new capital”.

The stores to close are: Altrincham, Aylesbury, Birkenhead, Birmingham, Bournemouth, Camberley, Cardiff, Carlisle, Chichester, Cirencester, Cwmbran, Darlington, Doncaster, Edinburgh Frasers, Epsom, Grimsby, High Wycombe, Hull, Leamington Spa, Lincoln, London Oxford Street, London King Willam Street, Middlesbrough, Milton Keynes, Plymouth, Shrewsbury, Skipton, Swindon, Telford, Wolverhampton and Worcester.

Two stores are excluded from the CVA proposals – Dundrum in the Republic of Ireland and Beatties in Solihull – because they are separate legal entities.

The company said the CVA would “affect up to 2,000 House of Fraser colleagues and a further 4,000 brand and concession partners. Those impacted by the proposed changes have already been informed.”

The consultation on the CVA proposal will take place over the next 17 days, and HoF will seek approval from its creditors on 22 June. It said stores would continue to trade as normal during that period. It is anticipated that stores scheduled for closure will remain open until early 2019.

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 while 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 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.”

As part of the CVA process, the company will relocate the Baker Street head office and Glasgow office to new locations.

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.”

Readers' comments (2)

  • The one thing about this inevitable situation is the lack of responsibility taken by House of Fraser itself. Thousands of people are losing their jobs, but no apology regarding the reckless manner the way the business has been 'managed' from what has been one of the worst run store groups in the last decade.

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  • Got to agree with the above statement, no apology from HOF to all the people losing there jobs, its like they dont care about there people and its just another throwaway , worst run store group , it would have been better if the top level managemnet were being booted out but alas its the tireless workers..shame on HOF but they have always been a giant and not moved with the times..they should be extinct tbh..

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