House of Fraser appoints administrators as rescue hopes fade

Department store chain House of Fraser has appointed administrators after talks with potential investors failed to result in a rescue.

In a statement, it said that talks with investors and creditors had “not concluded in a solvent solution.”

House of Fraser employs 17,500 people, including 11,500 concession staff. Earlier this month, a potential investor cancelled its fundraising plans to become a major shareholder.

C.banner, a retailer of footwear brands in China, was planning to invest £70m into the firm but cancelled its planned share placing due to falls in its share price. It had agreed in May to buy a 51% stake in House of Fraser.

House of Fraser said administrators EY had confirmed that the business would continue trading, including all stores and offices, while they attempted to complete a sale.

All 59 shops are set to open as usual today, including 31 that have already been earmarked for closure as part of a restructuring agreement.

The firm said: “Significant progress has been made towards completing a sale of the group’s business and assets.

“The proposed administrators are expected to continue to progress those discussions with a view to concluding a transaction shortly after their appointment.”

House of Fraser is one of many UK retailers this year to have been hit by increasing online competition, higher consumer spending, rising labour costs and higher business property taxes; leading to the administration of several high street names including Poundworld, Toys R Us, Maplin.