House of Fraser plans to close 31 of its stores, including its branch at the Friars Square Shopping Centre in Aylesbury, as part of a restructuring effort within the company.
The closures, which will affect more than half of the company’s 59 stores, puts 6,000 jobs at risk.
The department store was recently taken over by China’s C.banner, which bought a 51 per cent stake in the group from previous owner Nanjing Cenbest, in a deal which was contingent on House of Fraser entering a company voluntary arrangement (CVA) to sort out its debt problems.
A CVA is an insolvency process designed to let a firm with debt problems reach an agreement with creditors to help pay off part or all of its debts and avoid administration or liquidation.
Commenting on the CVA proposals Frank Slevin, chairman of House of Fraser 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 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.
“We have had constructive dialogue with a number of key stakeholders to date, and we will continue this engagement over the next 17 days.
“Ultimately, it will be for individual creditors to decide how they will vote on the CVAs.
“We believe the proposal has sought to find a solution that is fair for all parties, enabling us to secure vital new capital from C.banner.”
The following stores have been earmarked for closure:
> Edinburgh Frasers
> High Wycombe
> Leamington Spa
> London Oxford Street
> London King William Street
> Milton Keynes
Accountancy firm KPMG, which is overseeing the insolvency process, said the firm had been hit by ‘mounting pressures facing the UK High Street.’
In addition to the store closures, the department store chain is seeking to cut rents by 25% on 10 of the stores it is keeping open.
Of the 31 stores it wants to shut, it is seeking a 70% rent reduction for seven months, after which the stores will close.