Troubled department store chain House of Fraser could see further store closures after parent company Frasers Group warned of more job losses on the high street.
Chris Wootton, finance director of Frasers Group, told BBC Breakfast: “The High Street as a whole is absolutely in a mess. Business rates certainly contribute to that.”
Next April, the government moratorium on business rates ends, and they return to normal levels based on values assessed in 2015. Mr Wootton called that “insanity”.
“Unless the government does something, thousands and thousands of jobs and businesses will go. House of Fraser was paying double, treble, quadruple the rates they should be, and that’s not sustainable.”
So far House of Fraser has seen 11 of its 59 stores close that were bought out of administration in 2018. The Group is focusing on its digital presence, investing 100 million pounds to upgrade its online operations, said the BBC.
Further anticipated closures
Frasers did not specifiy how many further stores would close as rent negotiations were ongoing with landlords.”There are anticipated to be further closures over the coming period, the number of which will depend on the outcome of lease negotiation,” Frasers said.
Frasers Group has now reopened the majority of its stores after lockdown, while online sales were described as being “strong”.
In a statement to shareholders, David Daly Non-Executive Chair, said: FY20 will likely be remembered as the most challenging year in the history of the Company. The political uncertainty around Brexit had been with us for far too long and, just as we were feeling more confident of getting some clarity and stability, the Covid-19 crisis arrived which will continue to have an impact on the economy and our business beyond FY20.
The Group started FY20 with 53 House of Fraser stores in the UK and over the period five were closed resulting in a total store estate of 48. A large number of stores remain on flexible terms whilst long term lease negotiations continue. There are anticipated to be further closures over the coming period, the number of which will depend on the outcome of lease negotiation.
A new concept is currently under development for new Frasers stores.
Photo credit: FashionUnited; Article source BBC