House of Fraser confirms stores in Shrewsbury and Telford will close next year

The struggling department store chain will close 31 out of its 59 outlets through a Company Voluntary Arrangement (CVA), which will also allow it to secure rent reductions on its remaining shops.

Closures will affect up to 2,000 House of Fraser staff and a further 4,000 across brands and concessions.

The drastic plan will also see branches closed in Wolverhampton and Birmingham in a bid to rescue the rest of the struggling business.

A total of 150 people are employed in Telford, 83 in Shrewsbury, 279 at Beatties in Wolverhampton and 688 in Birmingham.

House of Fraser secured the backing of more than 75 per cent of creditors, including landlords, for the CVA at a meeting today.

It was voted through despite anger among landlords, who have complained that they are being forced to stomach a financial hit at the same time as House of Fraser enjoys new investment.

Closures are expected to start in January next year. Loss of the crucial vote on the rescue plan today could have pitched House of Fraser straight into administration, with stores closing and jobs lost in weeks or even days rather than in seven months time.

Alongside the CVA, Hamleys owner C.banner is being lined up to buy a 51 per cent stake in the firm and invest £70 million into what remains of the business.

At the meeting, furious landlords berated House of Fraser's management and their advisers at KPMG over how the CVA was conducted.

Complained

They complained that their share of the vote had been structured unfairly in an attempt to push through the restructuring proposal.

Despite their protestations, a representative for two of House of Fraser's landlords said there had been "no give" from the top team.

House of Fraser boss Alex Williamson had warned that the store closures and job losses represented the "last viable" option to save the retailer, with the group at risk of collapse had the CVA been rejected.

Mr Williamson and chairman Frank Slevin were both in attendance at the creditor vote.

House of Fraser said the shops earmarked for closure, including its Oxford Street store, would remain open until early 2019.

The group also plans to relocate its Baker Street head office and the Granite House office in Glasgow to help slash costs and "secure House of Fraser's future".