House of Fraser has been given the green light from creditors to axe more than half of its store estate, resulting in up to 6,000 job losses.
The embattled department store chain will close 31 out of its 59 outlets through a Company Voluntary Arrangement, which will also allow it to secure rent reductions on its remaining sites.
The closures will affect up to 2,000 House of Fraser staff and a further 4,000 across brands and concessions.
The department store’s flagship store on London’s Oxford Street will be closed, as will those located in a string of other major cities including Birmingham and Edinburgh.
SCROLL DOWN TO SEE THE 31 STORES BEING CLOSED
Closures: House of Fraser has secured backing for a radical store closure plan (Dominic Lipinski/PA)
The Chinese-owned department store managed to secure the backing of over 75 per cent of its creditors at a meeting to vote on the CVA today.
The proposals were given the green light despite anger among landlords, who have complained that they are being forced to stomach a financial hit at the same time as House of Fraser enjoys new investment.
Alongside the CVA, Hamleys owner C.banner is being lined up to buy a 51 per cent stake in the stricken department store and invest £70million into what remains of the business.
At today’s meeting, furious landlords berated House of Fraser’s management and their advisers at KPMG over how the CVA was conducted.
They complained that their share of the vote had been structured unfairly in an attempt to push through the restructuring proposal.
Despite their protestations, a representative for two of House of Fraser’s landlords said there had been ‘no give’ from the top team.
Backed: The Chinese-owned department store managed to secure the backing of over 75 per cent of its creditors at a meeting to vote on the CVA today
House of Fraser boss Alex Williamson had warned that the store closures and job losses represented the ‘last viable’ option to save the retailer, with the group at risk of collapse had the CVA been rejected.
31 House of Fraser stores closing
Altrincham, Aylesbury, Birkenhead, Birmingham, Bournemouth, Camberley, Cardiff, Carlisle, Chichester, Cirencester, Cwmbran, Darlington, Doncaster, Edinburgh Frasers, Epsom, Grimsby, High Wycombe, Hull, Leamington Spa, Lincoln, London Oxford Street, London King William Street, Middlesbrough, Milton Keynes, Plymouth, Shrewsbury, Skipton, Swindon, Telford, Wolverhampton, Worcester.
Mr Williamson and chairman Frank Slevin were both in attendance at the creditor vote.
House of Fraser said the shops earmarked for closure, including its London Oxford Street store, would remain open until early 2019.
Other sites set for closure include Birmingham, Bournemouth, Cardiff, Edinburgh, Grimsby, Plymouth and Swindon.
The group also plans to relocate its Baker Street head office and the Granite House office in Glasgow to help slash costs and ‘secure House of Fraser’s future.’
In January, House of Fraser reported a 2.9 per cent fall in sales in the six weeks to 23 December compared with a year earlier. Online sales fell by 7.5 per cent over the crucial Christmas period.
In April, House of Fraser revealed it had called in accountancy giant KPMG to review its restructuring options, including the possibility of a CVA.
A raft of CVAs have been struck in recent months as retailers struggle amid surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.
Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.
Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio’s, Byron and Prezzo all pushing through CVAs.
Earlier this year, high-street based retailers Toys R Us and Maplin both collapsed into the hands of administrators after struggling to drum up sales and profits against a never-ending surge in online competition.