Birmingham city centre’s House of Fraser store is closing down, it has been announced today.
The store, formerly Rackhams, at the junction of Cherry Street and Corporation Street, is expected to remain open until early 2019.
The store is among 31 (of its 59) across the UK which are to close. Midlands stores: Leamington, Shrewsbury, Telford, Wolverhampton and Worcester are also closing. Some 6,000 jobs are to be affected.
The group operates shops in Sutton Coldfield and Solihull, too. These stores are understood to be remaining open.
As part of the restructuring plan, which is being drawn up with the help of accountancy firm KPMG, House of Fraser could also ask for rent reductions on a further 11 outlets.
The store closures will be undertaken through a Company Voluntary Agreement (CVA), a controversial insolvency procedure in vogue among struggling retailers.
Frank Slevin, chairman of House of Fraser, said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.
“Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.
“So whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”
House of Fraser, which has 6,000 employees and 11,500 concession staff, requires the approval of 75% of its creditors for its plan to go ahead.
The retailer’s board is trying to push through its restructuring plan while securing new investment from Hamleys owner C.banner.
C.banner is being lined up to buy a 51% stake in House of Fraser and invest £70 million into what remains of the business. C.banner has raised £124 million in new shares to fund the transaction.
The department store’s Chinese owner, Sanpower, could publish details of its plans as soon as Thursday.
Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.
Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio’s, Prezzo, Byron and Prezzo all pushing through CVAs this year.
The House of Fraser stores identified for closure:
Altrincham, Aylesbury, Birkenhead, Birmingham, Bournemouth, Camberley, Cardiff, Carlisle, Chichester, Cirencester, Cwmbran, Darlington, Doncaster, Edinburgh Frasers, Epsom, Grimsby, High Wycombe, Hull, Leamington Spa, Lincoln, London Oxford Street, London King William Street, Middlesbrough, Milton Keynes, Plymouth, Shrewsbury, Skipton, Swindon, Telford, Wolverhampton, Worcester.