House of Fraser to close stores as part of rescue plan
House of Fraser’s Chinese parent company Nanjing Cenbest, which is part of Sanpower, has also announced that Hamleys owner C.banner is to acquire a 51% stake in the business. However, this is conditional on House of Fraser reducing its store portfolio which it will do via a Company Voluntary Arrangement.
Frank Slevin, chairman of House of Fraser, said: “With the support of Nanjing Cenbest and Sanpower, Alex Williamson and his team have made substantial progress on our transformation journey. However, we need to go further and faster if we are to confront the seismic shifts in the retail industry.
“There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base which increasingly shops channel agnostically. House of Fraser’s future will depend on creating the right portfolio of stores that are the right size and in the right location.“
House of Fraser said it will launch a formal CVA proposal around the beginning of June. Pending creditor approval, the store restructuring is expected to conclude in early 2019.
Following the sale of the stake to C.banner, Nanjing Cenbest will remain a significant minority shareholder. As part of the transaction, C.banner will subscribe for new shares in House of Fraser, thereby providing the necessary capital to accelearte its transformation plans.
Slevin added: “C.banner’s acquisition of 51% of House of Fraser, together with the new capital and restructuring, represents a step to securing House of Fraser’s long-term future.”
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