Shutting 31 stores last viable option - HoF chief
The boss of department store chain House of Fraser has warned that plans to close 31 outlets and axe 6,000 jobs represent the 'last viable' option to save the retailer, with the group at risk of collapse if the proposal is rejected.
The closures, announced on Thursday, account for over half of the chain’s 59 store estate across the UK and Ireland and are part of a radical rescue plan.
They are being undertaken through a company voluntary arrangement (CVA) - a controversial insolvency procedure in vogue among struggling retailers - and must be voted through by creditors.
But HoF CEO Alex Williamson said “We see it as the last viable, solvent proposal for the business.
“The CVA is an opportunity for all creditors to take a view on whether they believe in the viability [of House of Fraser] as a restructured business.”
If the CVA is approved by landlords, it will affect up to 2,000 House of Fraser staff and a further 4,000 across brands and concessions.
If it is rejected and the group fails to secure additional funding, then the firm could be forced to file for administration.
House of Fraser said the shops earmarked for closure, including its Oxford Street store, would remain open until early 2019.
The group also plans to relocate its Baker Street head office and the Granite House office in Glasgow to help slash costs and “secure House of Fraser’s future”.
The retailer said it had already informed staff set to be impacted by the plans, and was committed to “working with all those affected openly and with sensitivity over the months ahead”.
As well as the store closures, the restructuring deal will also see the rents slashed for a further 10 stores that will remain open.