More Concern for Guildford High Street Following News of House of Fraser Troubles

Published on: 5 Aug, 2018
Updated on: 5 Aug, 2018

The failure of a takeover deal that would have involved the closure of 31 out of 59 branches but provided £70 million of critical investment to the House of Fraser (HoF) chain has increased concern about the future of Guildford’s two anchor stores, HoF itself and Debenhams in Millbrook.

The announcement that C. banner, a Hong Kong firm, was pulling out of the proposed deal has, according to one national news report, plunged the House of Fraser chain “into crisis”.

The average number of jobs at each branch is 300. About one third are employed directly by HoF and the remainder indirectly through franchises located in the stores. HoF has yet to respond to a request from The Guildford Dragon NEWS to provide the number of employees at the Guildford store.

To remain solvent the heavily indebted chain needs cash to pay interest payments on its borrowings, settle rent and business rate demands and purchase stock for the forthcoming Christmas season.

The withdrawal of the C. banner offer came after a group of landlords mounted a legal challenge to HoF’s plan to enter a Company Voluntary Arrangement (CVA), an insolvency procedure that allows a company with debt problems to reach a voluntary agreement with its business creditors who receive only a percentage of the money owed.

The HoF CVA would, as well as reducing the debt burden, involve the closure of 31 branches, including those at Camberley and Epsom, but keep the Guildford store running. The challenge mounted by the landlords is to be heard on August 14.

Debenhams, Guildford

A possible new investment deal by Mike Ashley, director and founder of Sports Direct, who already controls an 11.1% stake in House of Fraser and a near-30% stake in Debenhams, is reported in the Sunday Times to be less likely now because of HoF’s pension fund commitments.

Whatever the outcome, questions will remain about the sustainability of two anchor department stores in Guildford, believed to represent around half a million square feet of retail floor space and there will be concerns about the possible economic and fiscal implications, locally, should either fail.

Additionally, current council plans for up to 420,000 square feet of new retail space on North Street might now look even more doubtful, especially following the Local Plan examiner’s remarks querying the logic of this allocation, despite GBC’s planning department’s defence of their decision.

Part of the 2000 House of Fraser expansion viewed from North Street.

House of Fraser, Guildford was refitted and relaunched as a new store in 2000. It was previously known as Army & Navy, and before that Harvey’s. The store includes the Jellicoe Heritage Roof Garden, a water garden designed and installed by the late Sir Geoffrey Jellicoe in 1958. It has a grade II listing from English Heritage and, according to the HoF website, has a dedicated gardener. [Source HoF website.]

See also: Comment: It Is True – The Number of Empty Shops in Guildford Is Increasing

Share This Post