House of Fraser store closures will see hundreds of jobs axed

House of Fraser plans to axe stores andput hundreds of jobs under threat in a major shake-up that will see the owner of Hamleys toy shop wrest control of the business.
The embattled department store chain has confirmed that Chinas C.banner International Holdings will buy a 51pcstake in the business from majority shareholders Nanjing Cenbest.
The move will see C.banner subscribe to new shares in House of Fraserand existing shares from Cenbest to help support the firm, which is expected to raise ?70m worth of fresh capital.
However, the deal rests on the retailer pursuing a Company Voluntary Arrangement (CVA), a type of insolvency process that allows companies to close stores and secure deep discount on rents.
A CVA could lead to a significant drop in its 59-strong UK store estate, which employs 6,000 people and about 11,500 concession staff.
House of Fraser store closures will see hundreds of jobs axed

Hamleys toy shop owner C.banner is on the cusp of taking control of House of Fraser
Frank Slevin, chairman,said the deal represents a step to securing House of Frasers long-term future.
He said: We need to go further and faster if we are to confront the seismic shifts in the retail industry.
There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base which increasingly shops channel agnostically.
House of Frasers future will depend on creating the right portfolio of stores that are the right size and in the right location.
A decision on whether to progress with the overhaul will be confirmed in early June, with the deal set to complete by the end of that month.
High street recession
House of Fraser is 89pc owned by Nanjing, a subsidiary of Chinas Sanpower. Nanjing will hold on to a significant minority interest in the retaileronce the deal is complete.
The company expects to complete the restructuring by early next year, but theCVA will need to winthe backing of creditors and landlords.
It comes after the firm hired accountancy giant KPMG to help overhaul the business and speed up its turnaround.
When Sanpower bought an 89pc stake in House of Fraser in 2014 it was widely reported that the Chinese conglomerate had pledged ?75m of available funding to the business, but thisfailed to materialise.
This figure has subsequently been denied by Mr Slevin, who said it was a misunderstanding.
However, Sanpower has beenploughing millions of pounds into the retailerin recent months to help put the group onto firmer financial ground.
House of Fraser is the latest in a long line of retailers seeking a CVA process. Flooring specialist Carpetright hasput 300 jobs in the firing line and plans to close 81 stores after creditors overwhelmingly backed a CVA.
House of Fraser store closures will see hundreds of jobs axed

Carpetright is planning to shut stores and axe jobs through a restructuring drive
Discount retailer Poundworld is also weighing hundreds of job cuts and nearly 100 store closures through a similar restructuring.
Retailers have been facing an uphill struggle on the high street in the face of weak consumer confidence and rising costs linked to the National Living Wage and hikes to business rates.
House of Fraser revealed last week that it had entered into a memorandum of understanding with C.Banner over the deal.
However, questions remainover the futureownership structure of the business.
What will 2018 have in store for the retail sector?
It is understood that talks over a potential stake sale between Nanjing and Chinese tourism development firm Wuji Wenhua are stillongoing.
C.banner, which snapped upHamleys for around ?100m in 2015, owns a string of footwear brands including Sundance, Steve Madden and United Nude.
Mr Slevin added: C.banners investment is a vote of confidence in our prospects.
We also know that if we are to deliver a sustainable, long-term business then we need to make difficult decisions about our underperforming legacy stores.
These measures are essential to ensure that House of Fraser remains an iconic department store group for many years to come.
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