House of Fraser’s company voluntary arrangement (CVA) has been billed as the tough action needed to stem the tide at the ailing retailer, but what happens to the retailer’s legacy store estate once the brand vacates the 31 stores on its closure list?
John Webber, head of rating at Colliers, said many HoF stores are unlikely to reopen: “Once a big shop closes on the high street, it puts pressure on all the others because all of a sudden people don’t want to go there. There are HoF shops that will certainly never rent again.”
Another property source added that regional towns such as Bournemouth and Darlington will be hit particularly hard as both HoF and M&S stores are earmarked for closure: “If you look at some of the towns they are coming out of, such as Darlington, which also had a BHS closure, you have a double whammy.
“[Landlords] may be able to overhaul the stores and put residential schemes in the upper floors but that will take time to get planning for the change of use. I don’t think there are many HoF stores where you think ‘yes, this is ready to go’. The majority will take time to get rid of [by landlords].”
Erol Ezen, director of Ezen Retail, believes it may be difficult to let the Oxford Street flagship: “If the store goes back to its German owner, its process is simple – design a new scheme to maximise value, which is likely to include either offices or hotel above the first floor and/or speak to potential occupiers for the whole.
“I think it’s unlikely there will be many department stores out there, either UK based or overseas, that would take the whole space, although no doubt they will all be targeted. Should this be the case, occupiers for a break-up will be targeted.
“Current market conditions and pricing will, however, make this a challenging process, although in the long term it is likely to generate greater value.”