The creditors of embattled retailer House of Fraser agreed on Friday to the terms of the Company Voluntary Arrangement put together by KPMG, meaning three stores in the region will close.
Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: “The approval of these CVAs provides House of Fraser with the breathing space it needs to proceed with its proposed operational restructuring plan across a smaller core portfolio of stores.”
As with all CVAs, more than 75% of creditors had to vote in favour in order to pass the resolution.
Stores in Altrincham, Birkenhead and Carlisle will close in early 2019, while House of Fraser will no longer be a part of the £300m Northgate scheme in Chester, which it was due to anchor. Only the Manchester store will remain in the region.
Appointed in April to create a turnaround plan for the Chinese-owned group, KPMG’s proposal was for 31 of 59 locations to close, for leases to be retained at current rates at 16 “Category One” stores, and for 75% of current rent to be paid at a further 10 stores – two stores, one in Ireland and one held in a separate legal entity, were not included in the CVA.
At the stores set to close, a reduced rent equating to 30% of the current rent will be paid for the remaining months before closure. A comprehensive rationalisation of the group was named as a condition of the business receiving investment from incoming majority shareholder C.banner.