House of Fraser new owner confirmed, CVA due soon
today May 3, 2018
A sigh of relief at House of Fraser Wednesday. The UK department store chain has a new 51% majority shareholder - and investor - in the shape of international retailer C.banner, replacing current parent, Sanpower-owned Nanjing Cenbest.
At the same time, HoF is to restructure via a company voluntary arrangement (CVA), which will be launched in early June and conclude in early 2019. That will mean a reduction in its store portfolio, although details have yet to be released. HoF said the move will provide the business with an “effective platform for future growth”.
It also said current parent Nanjing Cenbest is to remain a “significant minority shareholder” when C.Banner (which also control toy store Hamleys) takes over.
The transaction is expected to complete by the end of June and is subject to both bondholder and shareholder approvals.
In addition to acquiring existing shares, C.banner, which has extensive retail operations in China, will also subscribe for new shares in House of Fraser to provide fresh capital.
Frank Slevin, HoF chairman, said: “C.banner’s acquisition of 51% of House of Fraser, together with the new capital and restructuring, represents a step to securing [our] long-term future.
“With the support of Nanjing Cenbest and Sanpower, Alex Williamson and his team have made substantial progress on our transformation journey. However, we need to go further and faster if we are to confront the seismic shifts in the retail industry."
He added: “There is a need to create a leaner business that better serves the rapidly changing behaviours of a customer base which increasingly shops channel-agnostically. House of Fraser’s future will depend on creating the right portfolio of stores that are the right size and in the right location.
He also added that “if we are to deliver a sustainable, long-term business then we need to make difficult decisions about our underperforming legacy stores. I am all too aware that this creates uncertainty for my colleagues in the business and so we will be transparent with them throughout the process.”
C. Banner International Holdings owns or has licenses for brands ranging from C. Banner to Eblan, Sundance, Mio, Ash, JC Collezione, United Nude, Badgely Mischka, and Steve Madden.
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