House of Fraser is to close its store in Leamington Spa as plans to restructure the company get under way. 31 of its 59 stores are set to close nationwide, which is expected to create up to 6000 job losses in the UK and almost 200 in Leamington Spa.
The stores that will close are expected to stay open until early 2019, according to House of Fraser. The company has also said that they will support workers who will lose their jobs.
House of Fraser stores across the UK will commence closures through a Company Voluntary Arrangement (CVA) to restructure the business through insolvency proceedings.
CVAs are increasingly being used by struggling businesses to cut down costs and restructure businesses effectively. It has been used by House of Fraser as a last resort, after having tried ideas such as discounting and cutting costs before reaching this point.
House of Fraser’s Chinese owners Nanjing Cenbest reached a conditional deal to sell a 51% stake of the company to the owner of Hamley’s C. Banner. The sale depended heavily on the plans to restructure House of Fraser.
The chief executive of House of Fraser has said: “This was clearly a difficult decision to take but is, ultimately, the only one to secure our future.
“Our focus is on supporting all of our affected colleagues and we are exploring every opportunity available to them, working alongside the Retail Trust.”
Toys R Us and Maplin both collapsed into administration earlier this year, and some stores such as Mothercare and Carpetright have also closed stores.
Some of the reasons for this include a harsh economic climate due to falling consumer confidence, the growth of online shopping and a weaker pound.