Retail chain House of Fraser is to shut over half of its stores impacting around 6,000 jobs.
The closures are part of a proposed Company Voluntary Arrangement (CVA), which will require approval from creditors who will make their decision on June 22.
Currently, the troubled group operates 59 leased stores across the UK and Ireland, however the group’s Irish stores will not be affected by the closures, with its store in Dundrum excluded from the CVA as it is a separate legal entity.
In a statement today the company said that its property portfolio is “unstainable in its current form.”
Following what has been described as a “comprehensive review” of the group’s entire property portfolio, the directors of House of Fraser have identified 31 stores for closure, which will reduce the total store estate to 28 stores.
Commenting on the closures, Frank Slevin, chairman of House of Fraser, said that the retail industry is undergoing “fundamental change” and that the group urgently needs to adapt to the 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 whilst 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.”
It is expected that those stores scheduled for closure will remain open until early in 2019, and the company said that those impacted by the announcement have already been informed.
In preliminary results for Financial Year 2017 House of Fraser reported an operating profit of £19.8m, down from £31.8m the previous year.
Adjusted earnings before interest, taxation, depreciation and amortisation fell massively from £63.6m to £35.4m.
Article Source: http://tinyurl.com/kbwqb42
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