House of Fraser CVA plans wins backing

Creditors of House of Fraser have backed the department store group's plan to avoid going into administration and will see 31 of its 59 stores close with the loss of up to 6,000 jobs.

House of Fraser's company voluntary arrangement (CVA) was approved on Friday, paving the way for the firm to secure new funding, which would see its current majority shareholder, Chinese firm Sanpower, transfer its 89% holding to another China-based firm C.banner, which also owns toy retailer Hamley’s.

C Banner had promised it would invest £70m into the business if House of Fraser called for a CVA.

Despite protests from some investors, in a meeting on Friday the company received the necessary 75% of creditor votes to allow the CVA to go ahead.

As a result, House of Fraser will start to work on the closing of 31 stores which employ 6,000 people. The shutdown will include its flagship store in London’s Oxford Street.

Alex Williamson, House of Fraser’s chief executive officer, said: “We are grateful for creditor’s ongoing support and belief in the future of House of Fraser. This was clearly a difficult decision to take but is, ultimately, the only one to secure our future. Our focus is on supporting all of our affected colleagues and we are exploring every opportunity available to them working alongside the Retail Trust and the wider retail community.”

House of Fraser is the latest chain to vacate many British high streets, after the collapse of electronics retailer Maplin and toy stalwart Toys R Us earlier in the year, and as Marks & Spencer plans to close 100 locations.

It also comes less than two years after House of Fraser competitor British Home Stores closed its last location, after entering administration in 2016.

Analysis by The Telegraph estimated that 1,334 shops have been shut or earmarked for closure since the start of 2018, putting 23,400 jobs at risk.