House of Fraser seeks landlord support for down-sizing
Chinese-owned department store operator House of Fraser may seek support from UK landlords and creditors for a Company Voluntary Agreement (CVA).
That’s one of a range of options KPMG will consider after being appointed to advise on restructuring options for the London-headquartered company.
The appointment follows a drop in sales over the Christmas-New Year period and the shelving of plans to roll out stores across China.
Last month, parent Nanjing Cenbest, controlled by Sanpower, sold off a substantial stake in House of Fraser to tourism development company Wuji Wenhua.
Sanpower chairman Yuan Yafei is said to remain committed to the historic brand’s future and has been investing funds to keep it operational.
However, in its core UK market, House of Fraser is saddled with leases for space which is larger than its current format stores require. A CVA would allow it to reduce its lease costs and improve liquidity and would likely include the closure of some of the less profitable of its 59 stores.
A turnaround plan is expected to be released within several weeks.