Gift suppliers to the House of Fraser department store group are bracing themselves for the uncertain future of the retailer, with House of Fraser confirming that it will be closing stores as part of a CVA proposal. Its owner, Nanjing Cenbest (which owns 89% of the company), is reported to be selling 51% to Hamley’s owner C.Banner International if landlords agree to the CVA.
Currently, the retailer has 59 stores in the UK and Ireland, with several legacy stores in second or third tier locations. The sale is conditional on a restructuring of the business.
“The terms of the CVA have yet to be revealed, but with reduced rents and the closure of weaker stores, House of Fraser’s brand is not beyond repair,” predicts Charlotte Pearce, a retail analyst at GlobalData.
House of Fraser has also seen its online sales fall by 9.8% in 2017/2018 following the implementation of a new £25m website platform. “Turning its online sales around will be key to ensuring a positive future performance for the retailer,” states Charlotte. “Its continued run of discounting is unsustainable and will do little to help its operating margin which was just 1.1% in its full year 2016/2017. House of Fraser desperately needs investment to create stores in which it has the confidence to keep stock at full price for longer.”
Other high street retailers that have undergone CVAs this year include Poundworld, New Look and Carpetright.
Top: House of Fraser is set to close some of its stores resulting in job losses.
