Administrators called in at House of Fraser
Hull and Grimsby House of Fraser stores.
By Grimsby Telegraph | Posted: 10 Aug 2018
House of Fraser has fallen into administration, in a move that could accelerate its planned closures of its Grimsby and Hull outlets.
The department store chain, which has already announced its withdrawal from the Humber region, as well as Doncaster and Lincoln, said discussions between interested investors and its main creditors did not conclude in a “solvent solution” and it has no choice but to appoint administrators.
But House of Fraser said parts of the department store could still be rescued, most likely through a pre-pack administration process, where a new buyer cherry picks the best assets.
Whether this could offer a chink of light for the stores in this area remains to be seen, with empty shelves and depleted concessions becoming very apparent. A late January closure had been proposed, with Christmas the peak sales driver.
The company said “significant progress has been made” in reaching a sale of the group’s business and assets.
EY, which is expected to be appointed administrator today, will continue discussions with interested parties in the hope of reaching a deal “shortly after their appointment”.
Would-be suitors include sports chain tycoon Mike Ashley and Philip Day, the billionaire owner of Edinburgh Woollen Mill.
House of Fraser assured that its offices and stores will continue trading as normal while they look to reach a deal.
“All stores will be open for business as usual today,” it said in an announcement to the Luxembourg Stock Exchange.
Chief executive Alex Williamson said: “We are hopeful that the current negotiations will shortly be concluded.
“An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength.
“In the two weeks since the Cenbest and C.Banner transaction ceased, the directors have brought forward a number of potential buyers and the group's financial advisers have run a comprehensive M&A process to identify and then develop other third party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace.”
House of Fraser has been plunged into fresh crisis after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.
C.banner was planning to buy a 51 per cent stake in House of Fraser and plough £70 million into the ailing retailer, but scrapped the move last week.
Frank Slevin, chairman of House of Fraser, said: “This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan.
“Despite the very recent termination of the transaction between Cenbest and C.Banner, I am confident House of Fraser is close to securing its future.”