Closure fears for House of Fraser stores
House of Fraser stores in our region face an uncertain future after a restructuring plan for the business was announced that could involve closures and job losses.
Accountants KPMG have been taken on to advise on how the troubled company can be taken forward.
There are House of Fraser stores in Telford and Shrewsbury as well as the Beatties store in Wolverhampton.
The retailer, which is owned by Chinese conglomerate Sanpower, is looking at at a range of options, one of which could be an insolvency procedure known as a company voluntary agreement, or CVA.
Several retailers have pursued CVAs to save on costs this year. The procedure would involve House of Fraser seeking agreement from landlords to cut rents and possibly shutting some of its 59 stores.
House of Fraser has 6,000 employees, including hundreds in the West Midlands, and 11,500 concession staff.
Its troubles came to the fore in January after it suffered a drop in sales over Christmas.
The business has already started talking to landlords to reduce the size of its stores in a bid to cut its rent bill.
Sanpower chairman Yuan Yafei has voiced his commitment to House of Fraser and has been pumping millions of pounds into the retailer to keep it on an even keel.
House of Fraser’s woes comes at a torrid time for the retail sector, with thousands of jobs lost already this year. Toy R Us was one of the most high-profile retail casualties in the first quarter, with electronics retailer Maplin also going into administration on the same day.
Retailers including New Look and Carpetright have opted for CVAs this year, putting hundreds of jobs in doubt.
And Debenhams revealed a collapse in profits after a difficult winter.
