Beatties' future uncertain with House of Fraser bosses locked in crisis talks
House of Fraser is locked in crisis talks with lenders as it scrambles to avoid a calamitous collapse that would put thousands of jobs at risk.
The department chain – which owns the former Beatties in Wolverhampton – plans to launch a store closure programme next week as part of a major restructuring deal.
But according to reports, the Chinese-owned company is drawing up drastic contingency plans for administration.
House of Fraser’s collapse would endanger more than 17,000 staff across its 59 stores, including another major store in Birmingham city centre.
The group is racing to secure £70 million in fresh funding through a proposed rescue plan.
However, if the money does not materialise, it could file a notice to appoint administrators within days, one source said.
It has owned 131-year-old Beatties since 2005 and also has a store in Birmingham.
Wolverhampton South East MP Pat McFadden said: “This is worrying news. It would be a heavy blow to the city if Beatties was to close.
“This is an iconic Wolverhampton store which many people from outside the city would associate with Wolverhampton. If it goes its loss would be keenly felt.”
HoF is holding crisis talks with HSBC and the Industrial and Commercial Bank of China over the weekend, after the lenders expressed concern over the business’ bid to secure the money from a new investor.
The lenders, advised by EY, are demanding assurances that Hamleys owner C.banner will follow through on a promise of new funding when it takes a majority stake in the business. C.banner has pledged the cash injection on the condition the retailer pushes through a sweeping store closure programme via a Company Voluntary Agreement (CVA).
However, the store closures require approval from HoF’s landlords, who have not been supportive of the CVA. Bosses have been holding talks with landlords in a desperate bid to secure their approval, fearing they could vote against the CVA.
It needs 70 per cent of creditors to back the plan, and has also been seeking the approval of the Pensions Regulator. It is thought that about 20 House of Fraser stores could close if the CVA goes ahead. It is not known if the Wolverhampton branch is among that group.
