Stores to close as Hamleys owner agrees House of Fraser deal

C.banner, the Chinese retailer behind Hamleys, said it will buy a 51% stake in House of Fraser from its parent Nanjing Cenbest.

However, the sale is conditional on House of Fraser shutting stores.

The 59-strong chain will put forward a restructuring plan known as a company voluntary arrangement (CVA), which will require the approval of landlords and bondholders.

It has been suggested that as many as 20 stores may be closed putting hundreds of staff out of work.

Belfast’s House of Fraser store is this year celebrating its 10th annivesary since it opened as anchor tenant at the upmarket Victoria Squre development.

“It is very concerning to hear that House of Fraser is planning to close a number of stores,” said Retail NI Chief Executive Glyn Roberts.

“Given the huge importance of the Belfast store to both Victoria Square and the city centre economy as a whole, as a major footfall driver, I hope that it will continue to remain open”

“These are challenging times for the retail sector, given that in the last few months we have seen Carpetright, Maplin and Toys R Us all closing stores,” he added.

House of Fraser chairman Frank Slevin said C.banner’s acquisition was “a step to securing House of Fraser’s long-term future”.

“C.banner’s investment is a vote of confidence in our prospects,” he said.

“We know that if we are to deliver a sustainable, long-term business then we need to make difficult decisions about our under-performing legacy stores.

“I am all too aware that this creates uncertainty for my colleagues in the business and so we will be transparent with them throughout the process.”

The firm’s troubles came to the fore in January after it suffered a drop in Christmas sales and started talking to landlords about reducing the size of its property portfolio.

KPMG has been drafted it to advise House of Fraser on its restructuring proposal, with the terms of the plan likely to be finalised at the beginning of June.

House of Fraser is a subsidiary of Sanpower, a Chinese conglomerate chaired by Yuan Yafei.

Mr Yuan has voiced his commitment to House of Fraser, which has 6,000 employees and 11,500 concession staff, and has been pumping millions of pounds into the retailer to keep it on an even keel.

Several household names have pursued CVAs so far this year in a bid to save costs, including New Look, Carpetright and burger chain Byron.