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House of Fraser to close 31 0f its 59 shops with 6,000 jobs at risk

Department store chain House of Fraser is to close 31 of its 59 shops, affecting 6,000 jobs as part of a rescue deal.

If the plan is approved, 2,000 House of Fraser jobs will go, along with 4,000 brand and concession roles.

The stores scheduled for closure, which include its flagship London Oxford Street store, will stay open until early 2019, House of Fraser said.

The retailer needs the approval of 75 per cent of its creditors to go ahead.

Creditors will vote on the insolvency plan, which involves company voluntary arragements on June 22.

In May, House of Fraser’s Chinese owners Nanjing Cenbest reached a conditional agreement to sell a 51 per cent stake to Chinese owner of Hamley’s C.Banner.

House of Fraser chairman Frank Slevin, said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.

“Our legacy store estate has created an unsustainable cost base which, without restructuring, presents an existential threat to the business.”

Closing stores was a “very difficult decision,” he said, but “there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”

Accountancy firm KPMG, which is overseeing the insolvency process, said the firm had been hit by ‘mounting pressures facing the UK High Street.’

In addition to the store closures, the department store chain is seeking to cut rents by 25 per cent on rent of the stores it is keeping open. Of the 31 stores it wants to shut, it is seeking a 70 per cent rent reduction for seven months, after which the stores will close. 

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