The future of the embattled House of Fraser department store chain was hanging in the balance this weekend, as deadlock between its Chinese owner and lenders threatened to scupper its planned rescue package.
The GMB and shopworkers’ union Usdaw are watching from the sidelines, anxious about the risks of financial collapse for the store’s 17,000 employees, who work in its 59 stores across the UK.
The ailing retailer is seeking a company voluntary arrangement (CVA) – a complex insolvency procedure, which is increasingly being used by restaurateurs and retailers to shed loss-making sites – to allow it to restructure its store portfolio.
In an 11th-hour battle, it has been seeking to win over its landlords to avoid collapsing into administration. The restructuring plan is a condition for a multimillion-pound cash injection from C.banner, the Chinese owner of Hamleys.
The company is understood to have been reviewing its options after it upset its landlords by announcing a CVA, which would lead to the closure of at least 20 stores – a third of the total – without consulting them.
The company insisted on Sunday that, while it had hoped to launch the CVA at the beginning of June, the board expected it to be agreed within the next 10 days.
It said C.banner confirmed on 1 June that it would raise £124m through a share sale in Hong Kong, with the backing of its majority shareholder, to support the deal.
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