House of Fraser in administration putting thousands of jobs at risk

House of Fraser has given up on talks to save the business and called in administrators – putting hundreds of jobs at risk.

The retail firm employs 17,500 across the country and stores are set to open as usual today.

The company has been holding talks with investors and creditors, but a statement this morning said these have ‘not concluded in a solvent solution’, the Mirror reports .

In a statement House of Fraser said administrators Ernst & Young had been called in to run the business in an attempt to complete a sale.

Alex Williamson, chief executive of House of Fraser, said: “We are hopeful that the current negotiations will shortly be concluded.

“An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength.

“In the two weeks since the Cenbest and C.Banner transaction ceased, the directors have brought forward a number of potential buyers and the group’s financial advisors have run a comprehensive M&A process to identify and then develop other third party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace.”

House of Fraser chairman Frank Slevin said: “This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan.

“Despite the very recent termination of the transaction between Cenbest and C.Banner, I am confident House of Fraser is close to securing its future.”

House of Fraser employs more than 17,000 people
(Image: PA)

Plans have already been revealed to close 31 of their 59 leased stores across the UK and Ireland including the Altrincham branch – known as Rackhams to locals – which will shut by early 2019.

But Manchester city centre’s House of Fraser store at the iconic Kendals building on Deansgate was not included in a full closure list published by the retailer’s owners.

The 169-year-old firm confirmed last month that it filed in court proposals for Company Voluntary Arrangements, saying the plans were ‘central to the significant restructuring of the business, without which House of Fraser does not have a viable future’.

The retailer said it anticipated stores scheduled for closure would remain open until early in 2019.

Frank Slevin, chairman of House of Fraser, said at the time: “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.

“Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.

The House of Fraser building on Deansgate

“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 retailer’s board has been trying to push through its restructuring plan while securing new investment from Hamleys owner C.banner, a Chinese fashion conglomerate based in Nanjing.

C.banner is being lined up to buy a 51 per cent stake in House of Fraser from the department store’s Chinese owner, Sanpower, and invest £70 million into what remains of the business.

The beleaguered department store chain confirmed on Thursday that it must secure funding before August 20 as crunch talks with the potential rescuers continued.

“House of Fraser confirms that discussions continue with interested investors and its main secured creditors, which are focused on concluding as quickly as possible to enable receipt of an investment required by no later than 20 August 2018,” the group said in a statement on the Luxembourg Stock Exchange.

It said that if cash was not injected into the business, it would fall into administration.

House of Fraser’s lenders, which include HSBC, were locked in talks with would-be suitors, including tracksuit tycoon Mike Ashley and Philip Day, the billionaire owner of Edinburgh Woollen Mill.

Got a story or an issue you want us to investigate? Want to tell us about something going on where you live? Let us know – in complete confidence – by emailing newsdesk@men-news.co.uk, calling us on 0161 211 2323, tweeting us @MENnewsdesk or messaging us on our Facebook page . You can also send us a story tip using the form here . Join the Manchester Evening News breaking news Facebook group for a place to read and talk about breaking news in Greater Manchester.

You might also like More from author

Leave A Reply

Your email address will not be published.