House of Fraser is to be placed into administration after discussions with interested investors and its main secured creditors failed to conclude in a solvent solution.
The directors of the group’s operating companies – House of Fraser (Stores) Ltd, House of Fraser Ltd and James Beattie Ltd – have resolved to seek the appointment of individuals from Ernst & Young LLP as administrators of each with immediate effect.
In May, House of Fraser revealed plans to restructure through CVAs alongside new capital from C.banner, but falling share prices, coupled with a legal challenge to the CVA from landlords, disrupted the plan, prompting the would-be investor to withdraw its offer.
A statement from House of Fraser's PR channel reports that "significant progress has been made towards completing a sale of the group’s business and assets. The proposed administrators are expected to continue to progress those discussions with a view to concluding a transaction shortly after their appointment. The proposed administrators have confirmed that the business will continue trading, including all stores and offices, while they seek to complete a sale. All stores will be open for business as usual today".
Alex Williamson, chief executive of House of Fraser, says: “We are hopeful that the current negotiations will shortly be concluded. An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength.
"In the two weeks since the Cenbest and C.Banner transaction ceased, the directors have brought forward a number of potential buyers and the group’s financial advisors have run a comprehensive Mergers & Acquisitions (M&A) process to identify and then develop other third-party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace.”
Frank Slevin, chairman of House of Fraser, adds: “This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan. Despite the very recent termination of the transaction between Cenbest and C.Banner, I am confident House of Fraser is close to securing its future.”