House of Fraser suppliers have expressed shock and concern at the scale of store closures planned in its company voluntary arrangement (CVA) proposals, warning it may have a knock-on effect on brands and concession partners.
More from: House of Fraser CVA revealed
HoF plans to close 31 of its 59 stores, including some of its larger flagship sites – on London’s Oxford Street, and in Edinburgh and Birmingham.
One agent, who stocks brands in HoF, told Drapers he intended to pull his brands from the retailer as a result of the planned closures: “I’m not willing to risk it. HoF is still paying its bills, but it is hard enough out there without putting my brands and money at risk. We have only seen the start of it. So many brands rely on HoF for their livelihood, and we will see a knock-on effect. There’s nowhere else for some of these brands to go.”
One womenswear supplier to HoF agreed: “Some brands have a decent percentage of their turnover with [HoF]. There’s so much riding on this for all. I’m sure brands and concessions will only work with them on bank guarantee or letter of credit going forward.”
One supplier said he was “very concerned” about the knock-on effect on brands: “Everyone is very concerned about payment. HoF won’t pull payment before the vote goes through, as it needs the suppliers on board, but after that people are worried. There are some great brands in HoF and without it I’m not sure where they will go. There is no choice but for the CVA to go through.”
One menswear supplier said he was “in a state of shock”: “I didn’t think it would be this extreme. They are closing some really big, key stores, such as Birmingham, that allow HoF to buy in volume, so brands and concessions will really be impacted. I feel for all the staff, especially in the regional stores – it isn’t a restructuring, it is a massacre. The uncertainty for all is just beginning. HoF has a mountain to climb over the next few weeks but we all hope and pray it goes through as it is increasingly looking like there is no alternative.”
One footwear partner said: “It wasn’t a big surprise, but it’s a big disappointment that Oxford Street is to be closed as it is a landmark flagship store. In the past a lot of other CVAs haven’t been aggressive enough, so maybe it is better to close more stores but it will be painful for our sales associates, as it won’t be easy to find alternative employment in some areas.”
He added he believed the retailer would find its feet again: “I’m confident they will get the support but then it’s up to the management team to make it work with a more viable store estate. The business needs stability in order to start reviving its fortunes.”
Other suppliers also reiterated their support for HoF.
One womenswear concession partner said: “It’s certainly a sad day for HoF and for UK retail more generally – not just as a result of the direct loss of employment to store teams and local windows to the consumer, but also for the knock-on effect this will likely have on retail footfall in a number of these towns and cities.”
He added: “While it is not a favourable outcome for UK retail, a combination of channel shift and their own capital structure had quite probably made today’s announcement inevitable. In this context, we intend to continue to support Alex [Williamson CEO] and his team through our brand portfolio, both in their remaining store portfolio and online.”
One concession owner said: “It’s a very sad day that so many iconic department stores will be potentially closing in so many major towns and cities, and that so many people will be affected, but that this does reflect the changes and challenges we are all facing up to in our industry right now.
“I hope it will ensure and secure HoF’s future survival and certainly we would plan to continue to be part of that future.”
- Suppliers to House of Fraser have warned of “knock-on effects” of the CVA. Are you affected? Email email@example.com
Suppliers fear 'knock-on effects' of House of Fraser CVA