House of Fraser plans to close stores as new owners look to turn around the department store chain.
House of Fraser has confirmed that Chinese retailer C.banner, which also owns toy retailer Hamleys, is taking a 51% stake in the firm, shifting control from previous Chinese owner Nanjing Cenbest. The retailer intends to launch a company voluntary arrangement (CVA) under which it is likely to close some stores and renegotiate rents on others.
House of Fraser did not say how many stores are earmarked for closure.
The retailer currently has 59 stores in the UK and Ireland. There are more than 6,000 House of Fraser employees and 11,500 concession staff.
“There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base,” said Frank Slevin, chairman of House of Fraser. “House of Fraser’s future will depend on creating the right portfolio of stores that are the right size and in the right location.”
The deal is expected to complete by the end of June, with Nanjing Cenbest continuing to own a significant minority stake. C.banner’s stake will take the form of new shares in House of Fraser, for which it is expected to pay about £70m. Under Nanjing Cenbest’s ownership, there were plans for a big expansion of House of Fraser in China. However, only one Chinese store was ever opened, in Nanjing itself.
House of Fraser expects to make a formal CVA proposal during June, with a full restructuring in place by early 2019.