House of Fraser on brink of shutting more than half its stores
House of Fraser is set to unveil plans to close more than half its stores as the retailer's Chinese owner finalises a restructuring proposal that will put thousands of jobs at risk.
Sources told the Press Association that details leaked to the industry suggest the department store chain could shut 31 of its 59 stores.
As part of the restructuring plan, which is being drawn up with the help of accountancy firm KPMG, House of Fraser could also ask for rent reductions on a further 11 outlets.
The store closures will be undertaken through a Company Voluntary Agreement (CVA), a controversial insolvency procedure in vogue among struggling retailers.
Landlords, who must vote through the plan, have already expressed serious concerns about the proposals and met on Tuesday to discuss how to respond to House of Fraser.
Property agency JLL has teamed up with lawyers at Begbies Traynor to unite both institutional and individual landlords and advise on a course of action on House of Fraser's plans.
However, some landlords have already sold off freeholds and cashed out their investment in a bid to protect themselves from the upcoming store closures.
House of Fraser, which has 6,000 employees and 11,500 concession staff, requires the approval of 75% of its creditors for its plan to go ahead.
The retailer's board is trying to push through its restructuring plan while securing new investment from Hamleys owner C.banner.
C.banner is being lined up to buy a 51% stake in House of Fraser and invest £70 million into what remains of the business. C.banner has raised £124 million in new shares to fund the transaction.
The department store's Chinese owner, Sanpower, could publish details of its plans as soon as Thursday.
However, House of Fraser remains locked in talks with its lenders and has not confirmed when it will make a final announcement on store closures.
Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.
Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio's, Prezzo, Byron and Prezzo all pushing through CVAs this year.