Nanjing Cenbest, owner of House of Fraser, plans to sell a 51% in the department store business to international retailer C.banner (owener of Hamleys, among other assets), which will in turn lead to a subscription for new shares in the company, providing capital to accelerate the board’s transformation plans.

The agreement is subject to House of Fraser restructuring and reducing its store portfolio, which it plans to achieve through a CVA. 

House of Fraser intends to launch a formal CVA proposal at the beginning of June, and, pending creditor approval, the store restructuring is expected to conclude in early 2019. The overall transaction is expected to complete by the end of June 2018, subject to bondholder and shareholder approvals.

Frank Slevin, chairman of House of Fraser, says: “C.banner’s acquisition of 51% of House of Fraser, together with the new capital and restructuring, represents a step to securing House of Fraser’s 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. 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.

"C.banner’s investment is a vote of confidence in our prospects. We also know 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.

"These measures are essential to ensure that House of Fraser remains an iconic department store group for many years to come.”

Nanjing Cenbest will remain a significant minority shareholder.