Economy

House of Fraser rescue deal collapses as Hamley’s owners walk away

House of Fraser rescue deal collapses as Hamley’s owners walk away”

A legal challenge by landlords against House of Fraser's plan to close more than half its stores is set to be heard on 14 August, potentially easing the way for a cash injection to save the struggling department store business from collapse.

It's worth recalling that in order to alleviate its piling debt, House of Fraser agreed a controversial restructuring deal with its landlords in June.

The retailer employs 17,500 people - 6,000 direct and 11,500 concession staff.

It remains unclear whether any new deal for House of Fraser could result in a reprieve for the Carlisle store, which is due to close next year with a loss of around 150 jobs.

The company is looking for fresh investment after its rescuer pulled out of a deal to refinance the department stores group.

The Hong Kong-listed company issued a profit warning on Wednesday, fuelling concerns about its survival.

Sources said the funding shortfall at House of Fraser has raised doubts over its ability to stock its stores.

"In light of C.banner's announcement, House of Fraser is in discussions with alternative investors and is exploring options to obtain the required investment", HoF said in a statement.

Andrew Busby, of the consultancy Retail Reflections, said the chain's only hope for survival could be a merger with rival Debenhams.

House of Fraser said: "Discussions [with alternative investors] are ongoing and a further announcement will be made as and when appropriate". It also meant to introduce significant new capital.

The company is in talks with a number of potential investors understood to include Mike Ashley, the boss of Sports Direct, and Alteri, the former owner of Jones Bootmaker.

PHILIP Day, billionaire owner of high Street brands Jaeger and Peacocks, is considering a bid to save House of Fraser (HoF).



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