Landlords agree to House of Fraser CVA

A legal battle by House of Fraser landlords has been settled, which paves the way for a potential rescue deal.

The settlement means the department store chain can go ahead with its plan to close 31 of its 59 shops, which it announced in June as part of proposals for a company voluntary arrangement (CVA). But landlords were arguing that cutting rents at remaining stores as part of the CVA was unfair.

The Yorkshire stores earmarked for closure include Doncaster, Grimsby, Hull and Skipton. The chain has other stores across Yorkshire in Sheffield, Huddersfield, Leeds, Meadowhall, which have not been included on the closure list.

However, the agreement from landlords will not be enough to save House of Fraser’s, as it now needs to secure investment to survive.

The department store said: “House of Fraser is focused on concluding discussions with interested investors as per the original timelines set out by the business and recognising the risks in and around this litigation has entered into this settlement now to remove any risk to those discussions presented by this legal process. ”

Potential investors include Philip Day, owner of Edinburgh Woollen Mills and Mike Ashley, owner of Sports Direct, who last month approached the retailer about an investment deal.

Last week, Hong Kong-listed C.banner, owner of Hamleys, pulled out of plans to invest £70m in House of Fraser.