House of Fraser calls in turnround specialist KPMG
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The future of two established North West stores are in doubt as department store group House of Fraser became the latest retailer to hit problems.
The Glasgow-based group, which operates stores on Manchester’s Deansgate and in Birkenhead, has appointed turnround specialist KPMG to advise on its restructuring plan, which the retailer warns could lead to store closures and job losses.
House of Frase has 59 stores and 6,000 staff, as well as 11,500 concession staff.
Reports claim the group is considering all options, including a company voluntary arrangement (CVA), which would involve House of Fraser appealing to its landlords to reduce rents.
A CVA would allow House of Fraser to close loss-making stores and negotiate discounts on rents.
The business asked landlords in January to reduce rental levels following a disappointing Christmas period.
A spokesperson for House of Fraser confirmed the business had appointed KPMG and added it was “working closely with them to look at options that best support our transformation programme.”
The group has been talking to landlords since the beginning of the year and financial giant Rothschild is overseeing a refinancing of its £390m debts.
House of Fraser, whic was founded 169 years ago, was acquired by Chinese group Sanpower in 2014 for £450m.
The owner has been investing millions of pounds into the group recently to improve its finances.
Ratings expert Moody’s downgraded the group’s credit rating in December from B3 to Caa1 due to its poor trading in the first three quarters of last year, which it seaid were due to “both challenging market conditions and company-specific factors”.
Other high street casualties so far include fashion chain New Look, which plans to shut 60 stores and has put 980 jobs at risk after agreeing a CVA in March, and Carpetright is hoping to use the CVA process to close 81 shops.
Last month Conviviality, the group behind Bargain Booze and Wine Rack and the Magners and Bulmers cider brands, announced it was going into administration.