In another sign of distress on the UK’s beleaguered high-street retail sector, House of Fraser has announced plans to close stores in a bid to stay afloat.
The chain’s new Chinese owner, C.banner, which also own Hamleys toy stores, intends to enter a company voluntary arrangement (CVA), under which it is likely to close some stores and renegotiate rents on others.
“A CVA is designed to help a struggling company to pay back a proportion of its debts over time,” says the BBC. “It involves a strict repayment scheme overseen by an insolvency practitioner and must be approved by at least three quarters of the firm’s creditors.”
House of Fraser has 59 stores in the UK and employ roughly 17,500 people including concession staff.
It is hoped the move, which House of Fraser chairman, Frank Slevin, said is aimed at creating “a leaner business that better serves the rapidly changing behaviours of a customer base” will save the chain from the fate of other legacy high street names, such as BHS, Toys R Us and Maplin which have all gone into administration.
“Retailers have been facing an uphill struggle on the high street in the face of weak consumer confidence and rising costs linked to the National Living Wage and hikes to business rates” says The Daily Telegraph.
The BBC’s Daniel Thomas says the recent crisis engulfing Britain’s high street sector is due to a “perfect storm” of pressures, including: squeezed income, the shift to online shopping, changing consumer tastes, rising overheads and a glut of too many shops.