House of Fraser chairman Don McCarthy has said for a second time that the Icelandic economic crisis will have no impact on the strength of the UK department store business.
In a statement today, McCarthy said he remained confident on House of Fraser’s shareholder structure and debt position.
“As the economic crisis in Iceland deepens, the speculation continues to rise on the likely impact on Baugur and its future.”
“From time to time this speculation has enveloped House of Fraser. I felt that it was again important to clarify the independence of House of Fraser from these issues and to emphasise that they have no impact on the strength of its business, its operations or its trading performance.”
McCarthy acknowledged that Baugur was facing a difficult period, and had been “unwillingly drawn into the Icelandic banking crisis and the unfortunate political repercussions between the Icelandic and UK Governments”.
He added: “While we remain positive that the situation will be resolved, it is important to understand our distance from these events. House of Fraser is very confident of its broad and supportive shareholder structure and also of its debt position. As we have stated, our funding is supplied through a group of international banks, led by HBOS with whom we have a strong relationship and we have repaid and/or cancelled over £110 million of the debt as a result of the financial strength of the company and its ability to generate strong cash flows.”
“I hope that the Icelandic situation can be resolved quickly. In periods of economic change that everyone is facing at the moment, any lack of clarity and dangerous talk can only cause concern amongst the vast number of people employed in the retail industry.”
“To our employees and partners, I want to assure you of the strength of our management team, the strategy we have established and our confidence in delivering continued development through this tough period.”
The statement follows speculation about the impact of the Icelandic financial crisis on UK retailers which are connected to Icelandic investors and Banks, including Baugur which has a 35% stake in the department store group.