Beatties owner House of Fraser to close stores as part of restructuring deal

The move is certain to mean major job losses among its 17,500-strong workforce.

Around 6,000 people work directly for House of Fraser but another 11,500 work at concessions in its stores.

The troubled group will also try to persuade its creditors and lenders to back a CVA – Company Voluntary Arrangement – to help it cut costs.

In particular it will want to strike deals with its landlords to cut rents at some stores and agree to terminate leases early at branches that are losing money.

These will then face closure.

House of Fraser has owned 131-year-old Beatties since 2005.

The landmark Beatties in Wolverhampton city centre was opened in 1887 by James Beattie and became the cornerstone of a 12-strong department store empire.

At its height in the 1980s and 1990s, the Wolverhampton store alone employed more than 800 people.

What could happen to House of Fraser's stores?

House of Fraser is not saying yet how may stores will close, or which ones are in the firing line, but the process is due to start from June, when it hopes to secure the CVA deal.

The closure programme will be completed by early next year.

At the same time House of Fraser's owner, Chinese group Nanjing Cenbest, is selling 51 per cent of the business to another Chinese retail group, C.banner, which owns the famous Hamleys toy store chain.

The £70 million deal will make C.banner the majority shareholder and effective owner of House of Fraser and will pump fresh cash into the struggling business.

The sale is conditional on House of Fraser restructuring its store portfolio.

The company said: "The reduction of the store portfolio will provide the business with an effective platform for future growth."

Frank Slevin, chairman of House of Fraser, said: “C.banner’s acquisition of 51 per cent of House of Fraser, together with the new capital and restructuring, represents a step to securing House of Fraser’s long-term future.

"With the support of Nanjing Cenbest and Sanpower, Alex Williamson and his team have made substantial progress on our transformation journey. However, we need to go further and faster if we are to confront the seismic shifts in the retail industry.

"There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base which increasingly shops channel agnostically. House of Fraser’s future will depend on creating the right portfolio of stores that are the right size and in the right location.

"C.banner’s investment is a vote of confidence in our prospects.

"We also know that if we are to deliver a sustainable, long-term business then we need to make difficult decisions about our underperforming legacy stores. I am all too aware that this creates uncertainty for my colleagues in the business and so we will be transparent with them throughout the process.

"These measures are essential to ensure that House of Fraser remains an iconic department store group for many years to come.”

House of Fraser has been part of the British high street for nearly 170 years and currently has 59 stores across the UK and Ireland.

As well as the Beatties store in Wolverhampton and another in Solihull, House of Fraser has branches in Birmingham, Telford and Shrewsbury.