House of Fraser is reported to have turned down a “lowball” offer for the 31 stores it proposes to close under its planned CVA arrangements.
According to City AM, Paul McKie of a new entity called Fashion Collective, had made an offer to pay between £30,000 and £50,000 for the assets and business of each of the stores but this was deemed too low by the department store and his bankers, and any offer would have required the approval of landlords, which would have been unlikely to be forthcoming.
McKie told City AM: “We knew it was a bit of a lowball offer but we thought, since they’ve got this rent bill coming up, if they got rid of some of the stores we’d have taken on a chunk of that.”
The news was revelead following McKie’s audacious bid to take over a House of Fraser store in the City of London and turn it into a high-end department store with independent and emerging fashion brands. The landlord for the King William Street store put on hold plans to find a new tenant for the site.
Last weekend House of Fraser settled a legal challenge from a group of landlords who were challenging its plans to close the 31 stores, including its Oxford Street flagship and branches in Birmingham, Bournemouth, Cardiff, Plymouth and Worcester, early next year as part of its CVA.
The settling of the legal action was seen as a boost to the beleaguered business’s chances of finding a new financial backer after Chinese group C.banner pulled out of a potential deal last week. House of Fraser urgently needs to find £50m to pay its quarterly rent bill in September and secure stock for the crucial Christmas trading period.
Interested parties include turnaround specialists Alteri Investments and retail tycoon Philip Day, who this week augmented his Edinburgh Woollen Mill to Austin Reed empire with the purchase of the former Calvetron brands, including Jacques Vert and Windsmoor.