House of Fraser launches CVA to secure fresh investment

The new investment from Hamleys owner C.banner is dependent on a successful restructuring of its store portfolio via a company voluntary arrangement (CVA).

The beleaguered department store intends to launch the CVA around the beginning of June, with the restructure expected to conclude early in 2019.

A sharing issuing is expected and will provide further investment “to accelerate the board’s transformation plans”.

Current owner Nanjing Cenbest, the parent company of which is Sanpower, will remain a “significant” minority shareholder. The deal is expected to complete by the end of June and is subject to bondholder and shareholder approval.

House of Fraser chairman Frank Slevin said: “With the support of Nanjing Cenbest and Sanpower, Alex Williamson and his team have made substantial progress on our transformation journey. However, we need to go further and faster if we are to confront the seismic shifts in the retail industry.

“There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base which increasingly shops channel agnostically. House of Fraser’s future will depend on creating the right portfolio of stores that are the right size and in the right location.

“C.banner’s investment is a vote of confidence in our prospects. We also know that if we are to deliver a sustainable, long-term business then we need to make difficult decisions about our underperforming legacy stores.

“I am all too aware that this creates uncertainty for my colleagues in the business and so we will be transparent with them throughout the process.”

House of Fraser was acquired by Nanjing Cenbest in 2014.

Its ownership has been dogged by controversy with supposedly promised investment failing to materialise and a flurry of top-tier exits.

Boss Alex Williamson joined from Goodwood estates last summer.