London X-city features everything from business news to entertainment and the recent predicament of the troubled House of Fraser has been on the limelight ever since they closed 31 of their 59 stores after settling with their landlords.
The closures are due to happen by early 2019.
House of Fraser has failed to compete with other successful major stores like Selfridges & Harrods with some shoppers complaining that they are way too expensive. The department store has had a model that has not changed for over 100 years yet the times have changed and peoples shopping habits have also changed with many people looking to shop online. Low-cost retailers’ especially online retailers are not burdened by rent and have become a major competition to department stores like the House of Fraser.
The company agreed to an arrangement to allow it to deal with their mounting debt issues. The costs of running the store became unsustainable for them and it was necessary to close some branches in order to continue with operations.
The closures will be taken through a Company Voluntary-Agreement (CVA) which is a controversial procedure for insolvency among troubled retailers and they need creditors to approve most of their decisions. The CVA is a procedure that allows a company to settle debts by paying what it owes to creditors and come to an arrangement with them over the payments of its debts. The landlords after voting on the CVA will allow the franchise to continue its normal operations online. It is not the only retailer that has sought to use CVA in order to deal with their financial problems. Many stores have sought the help of CVAs to help them stay afloat. Many people have expressed their anger over employee cuts and their demand for rent cuts under CVA. Mark Williams, president of retail property organization, said that the House-of-Fraser was a business that had been underinvested in for many years and that was the ultimate reason for its failure.
History of the House-of-Fraser
The retailer was established in Glasgow in 1849 by Hugh Fraser & James Arthur. It grew steadily and become a national chain after the Second World-War. The business has acquired a number of companies over the years. It was bought by the Chinese conglomerate Sanpower group and they built it to become one of the best-known fashion brands in the UK.
The company has struggled over the past few years because of competitions, especially from online stores. The closure of some branches is meant to make it possible for the franchise to keep operating.The decision to close some branches will affect up to 6000 employees.
The branches that are set for closure include Altrincham, Birmingham, Bournemouth, Aylesbury, Birkenhead, Camberley, Chichester, Cirencester, Cardiff, Carlisle, Cwmbran, Edinburgh Frasers, Darlington, Doncaster, Wolverhampton, Epsom, Grimsby, Hull, Leamington Spa, High Wycombe, Lincoln, London Oxford-Street, Plymouth, Shrewsbury, London King-Willam Street, Milton Keynes, Skipton, Middlesbrough, Swindon, Telford, and Worcester.
The branches that are set to remain functional include Gateshead Metro-Centre, Manchester, Nottingham, Huddersfield, Leeds, Sheffield Meadowhall, Bluewater, Croydon, Sutton Coldfield, London City, London Victoria, Richmond, London Westfield, West Thurrock, Bristol, Cheltenham, Lakeside, Bath, Cirencester, Maidstone, Norwich, Guildford, Reading The Oracle, Edinburgh, Glasgow, Rushden Lakes, Loch-Lomond Shores, Exeter, and Belfast