Out of Court Settlement Reprieves House of Fraser in Guildford

Published on: 6 Aug, 2018
Updated on: 6 Aug, 2018

House of Fraser, Guildford High Street

The House of Fraser (HoF) store in Guildford along with 28 other branches of the troubled chain received a stay of execution today (August 6, 2018) following an out of court settlement. But 31 stores including those at Camberley and Epsom are expected to close.

A group of landlords were challenging HoF’s decision 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.

A spokesman for the landlord’s group said in a statement: “It remains our belief that applying a 75 percent arbitrary discount to the value of landlords’ claims is not the market norm and has no basis in law.”

However despite settling with the landlords the chain still desperately needs investment to meet rent and business rates liabilities and to purchase stock for the forthcoming Christmas season.

One person named in media reports as a possible investor is Phillip Day, owner of Edinburgh Woollen Mills, while Mike Ashley, owner of Sports Direct, who has a 21% share in Debenhams (also present in Guildford), is now reported to be less likely to make a bid.

House of Fraser is the biggest store on Guildford’s High Street and its loss would be a major blow to the town’s retail sector, which, after the high-tech sector, is the main contributor to the town’s economy.