HOUSE of Fraser has been given the go ahead from creditors to axe more than half of its stores, resulting in up to 6,000 job losses.
The struggling department store chain will close 31 out of its 59 outlets through a Company Voluntary Arrangement (CVA) in a bid to sort out its finances.
Closures will affect up to 2,000 House of Fraser staff and a further 4,000 across brands and concessions.
House of Fraser said the shops earmarked for closure, including its Oxford Street store, would remain open until early 2019.
The retailer also plans to relocate its Baker Street head office and the Granite House office in Glasgow to help slash costs and “secure House of Fraser’s future”.
House of Fraser secured the backing of more than 75 per cent of creditors, including landlords, for the CVA at a meeting on Friday.
Which House of Fraser stores are being closed?
HOUSE of Fraser stores identified for closure under the CVA porposal are:
- High Wycombe
- Leamington Spa
- London – City
- London – Oxford Street
- Milton Keynes
It was voted through even though landlords felt they were being forced take the fall at the same time House of Fraser enjoys new investment.
Alongside the CVA, Hamleys owner C.banner is being lined up to buy a 51 per cent stake in the firm and invest £70 million into what remains of the business.
At the meeting, furious landlords berated House of Fraser’s management and their advisers at KPMG over how the CVA was conducted.
They complained that their share of the vote had been structured unfairly in an attempt to push through the restructuring proposal.
Despite their protests, a representative for two of House of Fraser’s landlords said there had been “no give” from the top team.
House of Fraser boss Alex Williamson had warned that the store closures and job losses represented the “last viable” option to save the retailer, with the group at risk of collapse had the CVA been rejected.
Mr Williamson and chairman Frank Slevin were both in attendance at the creditor vote.
Will Wright, from KPMG – the firm behind the CVA – said that the deal provides the retailer with “breathing space” to turn the business around.
It’s the latest blow to the high street as retailers struggle with rising business rates, competition from online rivals and a slowdown in consumer spending.
A decision on the future of Poundworld is expected early next week.
In March, fashion retailer Next also revealed it will axe 60 of its shops putting 980 jobs at risk.
Meanwhile, baby chain Mothercare is reportedly considering whether to close up a third of its stores as it struggles to survive on the high street.
Earlier this year, two of the country’s largest retailers, Toys R Us and Maplin collapsed putting 5,500 jobs at risk.
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