A date has been set for the hearing of a legal challenge by landlords to oppose the planned closure of more than half of House of Fraser’s stores. If the department stores succeeds in seeing off the challenge, it will be a crucial step in its attempts to secure finance for its future survival.
On 14 August at the Edinburgh’s court of session, landlords will get the chance to make their case against the retailer being allowed to close 31 of its 59 stores as part of a CVA process, which was approved by shareholders in June.
Seeing off the challenge will be a huge step for the embattled department store whose CEO Alex Williamson has said that closing the stores is the “only viable option” to ensure the chain’s survival. House of Fraser is desperately trying to secure £50m in funding to stave off administration and give it the cash it needs to pay its next quarterly rent bill and buy stock for the Christmas trading period.
It was dealt a blow this week when Chinese investor C.banner pulled out of a deal to buy a 51% stake in the business from current owner Nanjing Cenbest (part of Sanpower) and inject £70m in cash, after its share price tanked meaning a proposed share placing to raise the funds was no longer possible.
There are however other interested parties including retail tycoons Mike Ashley of Sports Direct and Philip Day, the owner of Edinburgh Woollen Mill, Jaeger and Austin Reed. Restructuring specialists Hilco and Alteri are also believed to be interested.