ZCZC
BCN-46
BRITAIN-CHINA-RETAIL-BUSINESS
House of Fraser to shut half its stores in Britain, Ireland
LONDON, June 7, 2018 (BSS/AFP) – Britain’s Chinese-owned department store
chain House of Fraser announced Thursday that it will close more than half of
its branches in a rescue deal that places 6,000 jobs at risk.
House of Fraser, which has suffered from high costs and fierce online
competition, said in a statement that it will shutter 31 of its 59 stores in
the UK and Ireland.
The group has become the latest high-profile casualty on the British high
street, which is struggling to compete with online titans like Amazon at a
time of weak household spending.
The closures are part of a company voluntary arrangement — a process often
used by businesses in financial difficulty seeking to elude the threat of
administration or liquidation.
Chinese conglomerate Sanpower had bought majority 89-percent holding in
House of Fraser in a deal worth œ480 million ($646 million, 546 million
euros) in 2014.
Thursday’s announcement is aimed at securing the sale of a 51-percent stake
to China’s C.banner International Holdings, which already owns London toy
retailer Hamleys.
“The retail industry is undergoing fundamental change and House of Fraser
urgently needs to adapt to this fast-changing landscape in order to give it a
future and allow it to thrive,” said House of Fraser chairman Frank Slevin.
A spokesman confirmed the figure of 6,000 job losses, adding that this
would comprise both company employees and concession staff.
Stores scheduled for closure include the retailer’s flagship shop on
London’s Oxford Street, as well as its store in the capital’s City finance
district.
“Our legacy store estate has created an unsustainable cost base, which
without restructuring, presents an existential threat to the business,” added
Slevin.
“So 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.”
The group also plans to relocate its London head office to a new location
in order to cut costs.
Affected stores are expected to remain open until early 2019, while
employees have already been informed of the news.
“Today’s announcement is one of the most important in this company’s 169-
year history,” chief executive Alex Williamson said.
BSS/AFP/SR/1615 HRS