House of Fraser to shut four stores after failure to lower rents

The company, which bought the struggling department store chain out of administration in August, said it had held talks over 14 weeks with Intu Properties but had been unable to reach agreement – placing hundreds of jobs at risk.

HoF was yet to confirm exactly how many jobs were threatened.

It identified the stores to close as Lakeside in Essex, its Metrocentre operation in Gateshead and sites in Norwich and Nottingham.

The statement said: “We had various meetings with the landlord, Intu Properties, and adopted a flexible approach.

“Despite our best efforts we have been unable to agree reasonable terms for these stores to continue trading.

“Sadly, we are now in consultation with staff about the fact these stores face closure.

“We hope other institutional landlords will continue to work with us in order to save stores and jobs.”

Mr Ashley added: “Unfortunately, these stores now face closing in the New Year.

“I urge other institutional landlords to be more proactive to help save the HoF stores in their schemes.”

The billionaire businessman had warned when HoF came under his control that 20% of its 59 premises may have to be shut.

The previous management, who had planned to shut down half the sites in an effort to save the business, were thrown out as he prepared to make the chain become the “Harrods of the high street”.

In addition to Sports Direct and HoF he has further exposure to town centres through a 30% stake in Debenhams and has also recently bought Evans Cycles out of administration.

Mr Ashley also plans to cut 50% of Evans stores.

The high street has endured a brutal 2018 – with Toys R Us and Maplin the first casualties while a string of other big names have been forced to seek rescue deals with landlords.

Pressures have included rising rents, business rates and wage bills at a time of greater consumer restraint in the run-up to Brexit.

Landlords have attacked the growing use of Company Voluntary Arrangements (CVAs) by retailers looking to cut stores and reduce rent bills.

A legal challenge against House of Fraser’s pre-collapse CVA plan was settled out of court. House of Fraser fell into Mr Ashley’s hands just days later.

More follows…

Source: Read Full Article