Question mark hangs over future of House of Fraser in Norwich as negotiations continue
ARCHANT NORFOLK PHOTOGRAPHIC © 2005
House of Fraser’s landlord in Norwich is keeping its cards close to its chest over the future of the store.
Intu Properties – which runs Chapelfield shopping centre, where the department store is located – said negotiations were continuing with House of Fraser’s new owners about the rent paid on its branches.
The retailer is a tenant in four Intu shopping centres, including Chapelfield and Lakeside in Essex.
While Intu said it could not comment on the discussions it hinted that stores would be assessed on their value to the landlord and consumer as well as their capacity to stay “relevant”.
Its Norwich store was among the 28 branches due to be spared from closure in a company voluntary arrangement (CVA) agreed with creditors in June.
But the deal collapsed after C.banner, the Chinese owner of Hamleys, backed out of a plan to invest £70m in the company.
Administration proceedings followed before Sports Direct owner Mike Ashley announced he was buying the company for £90m in a “pre-pack” deal – which allowed him to leave behind debts to creditors and the company pension scheme.
Intu told the Financial Times in May that House of Fraser accounted for 7% of its estate but only 1% of its secured rent roll.
A spokesman for the company said: “We cannot comment on any ongoing discussions, but we work closely with all our tenants to help drive the best outcomes for all.
“Each case must be looked at on its own merits, the quality and health of the business and its ability to adapt and be relevant. And importantly its success at delivering value either for the landlord as for example an anchor store or for the customer in terms of its offer.”
After bargaining with landlords Sports Direct tycoon Mr Ashley has managed to save around seven House of Fraser stores including in Oxford Street, Telford and Plymouth.
But the billionaire, who has pledged to save 47 of its 59 outlets, has warned time is running out for the remainder of the estate.
A spokesman for House of Fraser said: “Some landlords are being very collaborative in order to give us a chance at turning the business around, giving House of Fraser a lifeline and saving hundreds of jobs.
“However, some greedy landlords would rather see the stores close than help save the jobs of hundreds of people.”