House of Fraser plans to shut down more than half of its UK stores as part of rescue plans. Credit: Jaggery

Department store chain House of Fraser is set to shut down more than half of its UK stores as part of a rescue plan.

Under a company voluntary arrangement (CVA), House of Fraser will shut down 31 stores by early next year, putting 6,000 jobs at risk. The retailer also plans to move out of its head offices in London and Glasgow.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

For the remainder of its stores, creditors are set to vote on the deal, which includes reducing rent by 25%, on 22 June.

House of Fraser chairman Frank Slevin said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.

“Our legacy store estate has created an unsustainable cost base, which, without restructuring, presents an existential threat to the business.

“So while closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The stores set for closure are: Altrincham, Aylesbury, Birkenhead, Birmingham, Bournemouth, Camberley, Cardiff, Carlisle, Chichester, Cirencester, Cwmbran, Darlington, Doncaster, Edinburgh Frasers, Epsom, Grimsby, High Wycombe, Hull, Leamington Spa, Lincoln, London Oxford Street, London King William Street, Middlesbrough, Milton Keynes, Plymouth, Shrewsbury, Skipton, Swindon, Telford, Wolverhampton, and Worcester.

The reconstruction is a condition of a deal that will give control of House of Fraser to the Chinese owner of Hamleys, Nanjing Cenbest.

In May, Nanjing Cenbest reached an agreement with C.banner to sell a 51% stake of the department store for £140m, leaving the current owner with a minority share.

Accountancy firm KPMG, overseeing the insolvency process, said the firm had been hit by ‘mounting pressures facing the UK High Street’. A number of retailers and restaurant groups, such as Mothercare, Carpetright, New Look and Jamie’s Italian, have recently used the CVA process to close their outlets.

The British Property Federation believes retailers are misusing the CVAs. On Thursday landlords called for an urgent government review of the rise in the use of CVAs, as they believe the process risks undermining the UK’s reputation and deters investment in town centres.

The British Property Federation chief executive Melanie Leech said: “The CVA process is intended to be part of a comprehensive business recovery plan. Property owners, looking after savers’ and pensioners’ money, will support businesses who demonstrate this commitment but must protect those pensioners against unfair action that penalises their interests.”