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Business briefing: House of Fraser to close 31 stores

Lights out:
House of
Oxford St
store in
London is
among 31
set to shut

UP to 6,000 jobs are under threat after department store chain House of Fraser announced the closure of 31 of its 59 stores in the UK and Ireland as part of a rescue plan.

The group said the planned closures, which include its flagship Oxford Street store and one in Birmingham, are part of a company voluntary arrangement.

If the CVA is approved by landlords, it will affect up to 2,000 House of Fraser staff and a further 4,000 across brands and concessions.

Shops identified for closure would trade until early next year. Stores staying open include Richmond and Victoria in London as well as Bath, Manchester, Leeds, Norwich and Glasgow.

The group plans to relocate its Baker Street head office and the Granite House office in Glasgow.

House of Fraser chairman Frank Slevin, said: ‘Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.’

He said the move is ‘absolutely necessary’ for the 169-year-old chain ‘to continue to trade and be competitive.’

Staff have been informed and the group is committed to working with them ‘openly and with sensitivity’.

Hamleys owner C.banner is being lined up to buy a 51 per cent stake and invest £70million but its cash injection is dependent on the CVA being agreed.

Landlords, who must vote through the plan, have already expressed serious concerns about the proposals. At least 75 per cent of creditor approval is needed, with the vote set for June 22.

EARMARKED FOR CLOSURE: Altrincham, Aylesbury, Birkenhead, Birmingham, Bournemouth, Camberley, Cardiff, Carlisle, Chichester, Cirencester, Cwmbran, Darlington, Doncaster, Edinburgh, Epsom, Grimsby, High Wycombe, Hull, Leamington Spa, Lincoln, London Oxford Street, London King William Street, Middlesbrough, Milton Keynes, Plymouth, Shrewsbury, Skipton, Swindon, Telford, Wolverhampton, Worcester

5,300 Poundworld jobs at risk as chain fails to attract buyer

CASH-STRAPPED Poundworld is poised to announce plans to appoint administrators, putting at least 5,000 jobs at risk.

The budget retailer — struggling with rising costs and the squeeze on high street spending — failed to secure a rescue buyer by Monday’s deadline.

Its US owner TPG Capital has filed the administration notice to give Poundworld protection from creditors for two weeks, sources said.

It will also give the retailer, which has 355 stores employing 5,300 people, time to structure a deal, which could be undertaken through a pre-pack administration with private equity firm R Capital, former owner of Little Chef. The administration will be handled by Poundworld’s advisers Deloitte, sources told the Press Association. Management has so far failed to sell Poundworld as a solvent business, after turnaround specialists Alteri Investors walked away from sales talks this week.

Poundworld’s losses widened in 2016-17 to £17.1million, from £5.4million of losses the year before.

Both Maplin and Toys ‘R’ Us have disappeared from the high street this year.

■ JOULES has defied high street gloom to announce that annual profits will be marginally ahead of a forecast £12.6million. The fashion retailer also said that revenue for the year ending May 27 was up 18.4 per cent to £185million. Chief executive Colin Porter said the performance showed the ‘strength and appeal’ of the brand which continued ‘to resonate with our growing and highly engaged customer base’.

Business Bites

■ ENERGY giant SSE must pay a £1million fine for sending inaccurate and misleading annual statements to 580,000 pre-payment meter customers. The money will go into Ofgem’s consumer redress fund.

■ THAMES Water will pay £120million to compensate customers after regulator Ofwat said its management ‘did not pay enough attention’ to solving leakage issues.