Fears for future of House of Fraser as chain asks landlords for rent cuts
Hull's House of Fraser store (Image: Google Maps)
By Hull Daily Mail | Posted: 8 Jan 2018
A popular Hull city centre department store could be in difficulty after bosses at the nationwide retail firm confirmed they had asked its landlords to reduce rent.
House of Fraser, which has 59 stores in the UK, including one in Paragon Street, has "informally" written to a number of owners asking for rent cuts.
The move comes after warnings that the chain could have to cut costs after a difficult 2017.
A spokeswoman for the company said: "We can confirm that we have contacted some of our landlords asking for their support as we drive forward with our transformation programme."
The announcement comes just days before House of Fraser and other multinational firms publish their Christmas trading figures.
Last September, a top credit ratings agency warned that the next few months would be “crucial” for House of Fraser.
The firm came under strain after the launch of a new web platform and "significant discounting" also took its toll on the business.
The chain said half-year earnings sunk to an £8.6m loss, down from a £900,000 profit in 2016, as website sales suffered from the roll-out of a £25 million online sales platform.
Gross profits also slipped five per cent to £196.9m over the period, as the group slashed prices on old stock to pave the way for a new womenswear brand.
Moody’s, a well known investors service, said the department store chain’s “credit quality remained highly exposed to performance over the crucial Christmas trading period".
The news that House of Fraser would be seeking rent reductions came after competitor Debenhams issued a profit warning earlier in the week.
The retailer, which has a store in Prospect Street, said UK like-for-like sales tumbled 2.6 per cent in the 17 weeks to December 30, with overall group sales down 1.8 per cent
Debenhams made the warning after it slashed prices to boost flagging sales over the festive period amid "competitive and volatile" trading.
Celebrating the Energy Estuary: Humber Renewables Awards shortlist is revealed