Struggling House of Fraser hunts for lifeline
House of Fraser has approached specialist lenders for tens of millions of pounds in emergency funding as harsh trading conditions leave it fighting for its life.
The company, which has struggled since being acquired by the Chinese tycoon Yuan Yafei, is understood to have asked for up to £40m from turnaround firms such as Alteri Investors, which is backed by the US hedge fund Apollo Global Management.
House of Fraser has approached specialist lenders for tens of millions of pounds in emergency funding as harsh trading conditions leave it fighting for its life.
The company, which has struggled since being acquired by the Chinese tycoon Yuan Yafei, is understood to have asked for up to £40m from turnaround firms such as Alteri Investors, which is backed by the US hedge fund Apollo Global Management.
The search for cash will raise concerns over House of Fraser’s ability to survive amid tightening consumer spending and the move to online shopping. The retail industry has been shaken by a wave of insolvencies and restructurings, with companies including bed maker Warren Evans going bust and New Look pushing through rent cuts and shop closures.
It has £400m of loans, made up of bank debt and bonds according to the Telegraph.
The Guardian adds that House of Fraser, which was bought by the Chinese conglomerate Sanpower in 2014, suffered a tough Christmas with store sales down 2.9% and online sales tumbling 7.5% compared with the previous year. The company, which has 59 stores and 17,500 staff, is already trying to cut its high street footprint by 30%.
British retailers have had a dismal start to the year -the worst since 2013 – as they grapple with rising business rates and other costs, while struggling to fill their stores with customers who are increasingly buying online.
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