The original announcement to close certain stores was made in June of this year by the company’s senior management, and heralded the possible demise of yet another of the UK’s big high street brands. The closures could cost upwards of 5,000 jobs.
However, even this drastic plan of action seems fraught with obstacles. The House of Fraser’s ‘company voluntary arrangements’ (CVA), was rejected by the company’s landlords, who launched a legal challenge believing they were being unfairly treated. This in turn led to a rescue package of £70-million being withdrawn by Hong Kong firm C. banner, owner of Hamleys.
It was almost 170 years ago, 1849 in Glasgow, when the drapery store, Arthur and Fraser, first opened its doors. By 1891 it was trading as Fraser and Sons, and continued expanding operations during the early 1900s, through World War I, and into World War II. In 1941, Fraser and Sons became The House of Fraser. By 1959, the business had over 100 retail outlets in the UK, and continued acquiring other well-known brands, including London’s famous Harrods department store.
In 1985 the group was taken over by the Fayeds, and in 1994 was launched on the UK Stock Exchange, to became a £484-million PLC. Although the company continued expanding, and launching new brands and lines through the first decade of the 21st century, the cracks were beginning to appear. The House of Fraser opened its first international store in Abu Dhabi in 2013, yet millions of pounds worth of losses were already beginning to surface.
Currently, the House of Fraser is owned by Chinese company Sanpower, 89%, and Mike Ashley (of Sports Direct fame), 11%. Already rumours are surfacing. It is said Mike Ashley was considering a £50-million rescue package to prop up the ailing company, but is now reconsidering his options, due to concerns over the company’s pension pot. Other large players in the retail sector are said to be interested in bailing out the business, but whether hard talk turns into hard cash remains to be seen.
House of Fraser already has an ecommerce operation which is looking a lot healthier than its high street businesses. It may well be, if the hoped for cash injection fails to materialise, that House of Fraser, like others before it, is destined to close up shop, and become just another online retailer.
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