House of Fraser has confirmed that it has filed proposals for Company Voluntary Arrangements (CVAs), with directors identifying 31 stores for closure, including its London Oxford Street flagship store.

House of Fraser believes that the proposals are central to the survival of the company, with the current property portfolio “unsustainable in its current form”. The store closures will reduce the total store estate to 28, while the Baker Street head office and Granite House office in Glasgow will also be relocated.

The CVA proposal follows the announcement last week that C Banner – the Chinese fashion conglomerate – is set to acquire a 51 per cent stake in the House of Fraser Group, with intention to introduce “significant new capital”.

Frank Slevin, chairman of House of Fraser, attributed the store closures to the “fundamental change” that is ongoing in the retail industry. “Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.

“Whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive,” he said.

The announcement has triggered backlash from the British Property Federation (BPF), which has called on the government to launch an independent review into the CVA process. According to the BPF, the process is “being misused, and this risks undermining the UK’s global reputation”.

The trade association said that recent examples have shown a “lack of transparency and unfair discrimination” between creditors in the proposals.

Share Story: