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British retail giant announces dozens of high-street store closures
Last Updated: 2018-06-08 03:22 | Xinhua
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The British retailer House of Fraser (HoF) announced on Thursday a significant withdrawal from its high-street presence with the planned closure of 31 stores, slightly more than half its total presence.

HoF is a flagship brand present in the largest cities and towns across Britain, and the announcement marks the latest retrenchment of a high-profile name from bricks-and-mortar retailing in the face of changing customer behavior.

HoF plans to shut its flagship store on London's Oxford Street as well as stores in big cities such as Birmingham, Edinburgh and Cardiff. Up to 6,000 jobs are at risk, 2,000 within the company and 4,000 workers operating concessions within HoF stores.

The planned store closures are part of a scheme to restructure the company's debt and reorganize it in order to secure its future.

The scheme comes under a Company Voluntary Arrangement (CVA) plan, which will need the agreement of 75 percent of the company's creditors and which will be decided upon on June 22.

The rise of digital retailing has proved a challenge to traditional businesses, whose brands have dominated retailing for decades.

In addition, weakening trading conditions on the high street in the first quarter of this year and over the previous year have put pressure on retailers, with consumer spending growth moderating downwards.

Office of National Statistics (ONS) figures for the first quarter of this year showed household spending grew by 1.1 percent over the year, behind wage growth, inflation and GDP growth figures, and had weakened to 0.2 percent quarter-on-quarter growth.

HoF said in January that sales in the six weeks up to Christmas 2017 were 2.9 percent down year-on-year, but profits had improved slightly, by 0.5 percentage points.

Changing footfall patterns and rising rents have also put pressure on retailers.

HoF chairman Frank Slevin said in a statement to Xinhua: "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."

Slevin said the company's stock of retail outlets had created an unsustainable cost base, which presented an existential threat to the business and needed restructuring.

In addition to closing the stores, there are plans to renegotiate lower rents at other stores.

Slevin added: "So while 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."

HoF decision comes after a string of high-profile closures, liquidations and retrenchments of businesses.

At the end of May Marks & Spencer announced it would extend a program of store closures to close 100 of its outlets by the end of 2020.

In February, the electronics retailer Maplin announced it was going into administration, and several of its branches across the country are closing.

Another familiar high street brand Mothercare announced a plan in May to close 50 of its 137 stores in Britain over the next year with a threat of up to 800 job losses.

HoF said in its statement that international retailer C.banner had entered into a conditional agreement in early May to acquire a 51 percent stake in House of Fraser Group Ltd, which is currently owned by Nanjing Cenbest, a listed company in China.

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