House of Fraser to close stores in restructuring as Hamleys owner takes 51% stake

House of Fraser has announced plans to shut stores as part of a restructuring deal that will see the Chinese owner of Hamleys, C.banner, take a 51% stake in the struggling department store chain.

The retailer's parent company, Nanjing Cenbest said on Wednesday that as part of the deal, C.banner will subscribe for new shares, providing "vital" capital to accelerate the board's transformation plans.

The transaction, which will leave Nanjing with a significant minority shareholding and is subject to the restructuring of the store portfolio, is expected to complete by the end of next month.

The retailer plans to launch a formal company voluntary arrangement around the beginning of June, with the store restructuring due to end early next year.

Chairman Frank Slevin said: "C.banner’s acquisition of 51% of House of Fraser, together with the new capital and restructuring, represents a step to securing House of Fraser’s long-term future.

"There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base which increasingly shops channel agnostically. House of Fraser’s future will depend on creating the right portfolio of stores that are the right size and in the right location. C.banner’s investment is a vote of confidence in our prospects. We also know that if we are to deliver a sustainable, long-term business then we need to make difficult decisions about our underperforming legacy stores.

"I am all too aware that this creates uncertainty for my colleagues in the business and so we will be transparent with them throughout the process. These measures are essential to ensure that House of Fraser remains an iconic department store group for many years to come."

House of Fraser has 59 stores across the UK and Ireland, with more than 6,000 employees and 11,500 concession staff.