House of Fraser staff await fate – Over 17,000 jobs in the balance as firm restructures | City & Business | Finance



The CVA will allow the retailer to axe unprofitable stores and slash the rent it pays on a number of others. However, a number of landlords intend to vote against the CVA, as they feel it unfairly inflicts losses on them, while sparing all of the other creditors.

The fact that House of Fraser’s owner Nanjing Cenbest will get £70million from selling a 51 per cent stake in the firm to Hamley’s owner C.banner as part of the restructuring has particularly angered them.

Accountancy giant KPMG is advising House of Fraser on its CVA proposals and a source said it is “preparing for all eventualities”, which includes it acting as administrator to the struggling retailer.

He added: “If the vote [on Friday] goes against us then House of Fraser does not have a future. It will go into administration.”

A source close to the landlords countered: “They are very upset and some are happier to take their chances in administration than vote for the CVA.”

Under the terms of the CVA, , which would result in the loss of 6,000 jobs.

The restructuring will see it axe its landmark stores on London’s Oxford Street and King William Street and all its standalone shops, as well as slash rents on 10 other sites.

The firm employs 17,500 directly and through its concessions.

A group of landlords, which include pension funds and insurers, plan to file a legal challenge against House of Fraser and the CVA, which could delay the vote.

The landlords are represented by restructuring experts at Begbies Traynor and property agency JLL, who are preparing to act for them in talks with a host of retailers and leisure groups that they believe are set to use CVAs to improve their finances.

A source close to the landlords said that they fear that retailers and restaurateurs are starting to use CVAs as a “standard profit improvement tool”, instead of as a last resort, as they were originally intended.

A number of high-street stalwarts, including New Look, House of Fraser, Carluccio’s, Jamie’s Italian, Mothercare, Carpetright and Byron Burger, have or plan to use CVAs to improve their financial positions.


Bonmarche is set to add to the chill on the high street tomorrow, when it is expected to say sales are under pressure at its annual results.

Revenues are predicted to be flat at £189.1million, even though the retailer’s profits are tipped to be a third higher at £7.8million due to cost cutting, tight stock control, a stronger pound and solid online sales.


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