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Gloucestershire Business News

Business leader devastated as Gloucestershire department store set to close

A much-loved county department store is to shut as part of a rescue plan for its struggling parent group.

House of Fraser is closing 31 of its 59 shops including the chain's outlet in Cirencester. The company's flagship Cheltenham store, Cavendish House, is not affected and will remain open.

Last month House of Fraser's Chinese owners Nanjing Cenbest reached a conditional agreement to sell a 51 per cent stake to the Chinese owner of Hamley's, C.banner.

It is believed that under the restructuring some 6,000 jobs will go including brand and concession roles.

Ian Mean, director of Gloucestershire Chamber, Business West, said: "I am devastated for House of Fraser employees and their families who are affected by the store closure.

"The retail environment has changed drastically in recent years, meaning that House of Fraser are no longer just competing with the likes Debenhams, John Lewis or Marks & Spencer, but with Amazon and eBay, meaning that ultimately tough decisions have to be made.

"My hope is that the store closure won't hurt Cirencester too much, it has a strong reputation for independent retailers and new businesses are popping up all the time.

"Moreover, as the retail sector modernises, jobs in stores are replaced with new, highly skilled jobs in retail technology and systems, and as such we should embrace change and see it as an opportunity for the county of Gloucestershire."

In a statement House of Fraser said it had filed proposals for Company Voluntary Arrangements (CVAs) in respect of House of Fraser (Stores) Limited and House of Fraser Limited.

"These proposals are central to the significant restructuring of the business, without which House of Fraser does not believe it has a viable future," the company said.

"Currently, House of Fraser operates 59 leased stores across the UK and Ireland and its property portfolio is unsustainable in its current form. Following a comprehensive review of the group's entire property portfolio, the directors of the companies have identified 31 stores for closure which will reduce the total store estate to 28 stores.

"As part of this CVA process, the company also proposes to relocate its Baker Street head office and Granite House office in Glasgow to new locations. This will help to reduce costs and secure House of Fraser's future."

The House of Fraser stores earmarked for closure include those in Worcester, Swindon, Cardiff, Birmingham and Plymouth.

Frank Slevin, chairman of House of Fraser said: "The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.

"Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business. So whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.

"We have had constructive dialogue with a number of key stakeholders to date, and we will continue this engagement over the next 17 days. Ultimately, it will be for individual creditors to decide how they will vote on the CVAs. We believe the proposal has sought to find a solution that is fair for all parties, enabling us to secure vital new capital from C.banner."

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