House of Fraser store closures on cards as Hamleys owner takes major stake

House of Fraser has announced plans to close stores as part of a major restructure in a deal which will see the Chinese owner of Hamleys take a major stake.

The retailer, which has stores in Leeds, Hull, Doncaster, Grimsby, Huddersfield, Skipton and Meadowhall, along with a number of concession stores in shopping centres across the region, said China’s C.banner, which also owns Hamleys, is taking a 51% stake, shifting control from another Chinese firm, Nanjing Cenbest, BBC News reported.

House of Fraser intends to launch a company voluntary arrangement (CVA), under which it is likely to close some stores and renegotiate rents on others.

It did not say how many stores are earmarked for closure.

House of Fraser has 59 stores in the UK and Ireland, more than 6,000 employees and 11,500 concession staff.

Frank Slevin, the chairman, said: “There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base.

“House of Fraser’s future will depend on creating the right portfolio of stores that are the right size and in the right location.”

C.banner, which is listed on the Hong Kong stock exchange, is expected to raise about £70m by issuing new shares.

The deal is expected to complete by the end of June and Nanjing Cenbest will continue to hold a significant minority stake.

Low consumer confidence and the rise of online shopping has created chaos in the retail sector.

A string of firms including Debenhams, House of Fraser, New Look and bargain retailers such as Poundworld have all had problems.

High profile collapses have included Toys R Us, Bargain Booze owners Constellation and Maplins.