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House Of Fraser and Poundworld turmoil threatens 11,000 jobs

MORE than 11,000 jobs are at risk after embattled department store chain House Of Fraser and budget retailer Poundworld revealed plans that look set to trigger multiple store closures.

Up to 6,000 jobs at House Of Fraser are under threat as the company announced 31 of its 59 stores will have to shut across the UK and Ireland as part of a rescue bid.

And Poundworld is poised to announce its intention to appoint administrators, leaving 5,300 workers sweating over their futures.

Poundworld is low on cash and is filing the notice because it will give the business protection from its creditors for two weeks, sources told the Press Association.

The two groups are the latest to show significant financial distress this year, with both Maplin and Toys R Us disappearing from the high street already in 2018.

House Of Fraser said the planned closures, which include its Oxford Street store, come as part of a company voluntary arrangement (CVA) — a controversial insolvency procedure in vogue among struggling retailers.

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.

It said the shops earmarked for closure would remain open until early 2019.

Alex Williamson, chief executive of House of Fraser, said: ‘Today’s announcement is one of the most important in this company’s 169-year history.

‘We, as a management team, have a responsibility to take necessary steps to ensure House Of Fraser’s survival, which is why we are making these proposals.

‘We are fully committed to supporting those personally affected by the proposals.’

Customers of the retail giant were left shocked with many blaming online shopping for the closure.

Shopper Laura Green said: ‘It’s going to be really strange having these big gaps on our high streets.’

And customer Julia Staniforth said: ‘It’s very disappointing, I think it’s due to the rise in online shopping and people not buying on the high street.’

Gone: Toys R Us has already disappeared from the high street this year

As well as the store closures, House Of Fraser’s restructuring deal will also see the rents slashed for a further 10 stores that will remain open.

Landlords, who must vote through the plan, have already expressed serious concerns about the proposals and met on Tuesday to discuss how to respond to House Of Fraser.

At least 75 per cent of creditor approval is needed, with the vote set to take place on June 22.

A raft of CVAs have been struck in recent months as retailers struggle amid surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.

Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.

The House Of Fraser stores identified for closure under the CVA proposal are:

Altrincham, Aylesbury, Birkenhead, Birmingham, Bournemouth, Camberley, Cardiff, Carlisle, Chichester, Cirencester, Cwmbran, Darlington, Doncaster, Edinburgh Frasers, 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.