House of Fraser announce the closure of 31 stores of its 59 stores, as it looks to settle a legal row with landlords, and find a potential investor.
The struggling department chain reached the settlement with landlords to close over half of its locations, as it looks to strengthen its position to negotiate a rescue deal.
Last week, talks between C.banner, the owner of Hamleys, and House of Fraser collapsed.
Amid a difficult retail trading environment, House of Fraser is seeking £50 million to avoid collapse, which would place approximately 17,000 jobs under threat.
House of Fraser commented that is “focused on concluding discussions with interested investors” and the out-of-court settlement with the landlords had removed “any risk to those discussions”.
In a statement released by their legal team, the landlords said: “Although we will not have our day in court, we are pleased with the outcome and hope that our landmark legal challenge sends a clear message to any other companies considering a CVA, on the importance of transparency and fair treatment for all creditors throughout a CVA process.
“Landlords are always willing to enter into a proper dialogue with companies and their advisers with the aim of rescuing a business. However, the retail CVA process in the UK has become increasingly misused and prejudiced against landlords and needs correcting. CVAs were designed as a means to rescue a business, not simply a tool to shed undesirable leases for the benefit of equity shareholders.”
Currently, House of Fraser has 59 stores across the UK and Ireland, employing 6,000 staff, alongside 11,500 concession staff.
In 2014, the high street giant was acquired by Sandpower, which is owned by Chinese businessman Yuan Yafei.
House of Fraser is one of many UK high street brands to feel the pinch of economic uncertainty and high inflation hitting the retail sector.
