Fraser stores’ rescue failure

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THE future of House of Fraser is in doubt after its potential Chinese saviour was forced to drop a £150m share placing meant to fund a rescue deal. House of Fraser agreed a court-approved extension of its debt repayment deadlines last week.

Retail tycoon Mike Ashley, the Sports Direct founder who already owns an 11 per cent stake in House of Fraser, has reportedly held talks in recent weeks with a view to offering a £50million loan.

However, the Hong Kong-listed company's shares have fallen by 70% in the past two months and it issued a profit warning on Wednesday.

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The department store chain is now said to be "exploring options to obtain the required investment on the same timetable".

"Discussions are ongoing and a further announcement will be made as and when appropriate", it said. Sales in its main shoe retailing business have slumped in the face of online competition, and the plan to buy control of House of Fraser had wiped out three quarters of its stock-market value. "Only then can House of Fraser offer the seamless brick and click multiplatform approach to sales that is essential for modern retailers". Sources close to HoF quoted by the television channel said Alteri was one of several "credible" potential investors, alongside Sports Direct International.

It is understood that senior accountants have now been put on standby by House of Fraser's lenders to handle what would be the biggest high street failure since Woolworths collapsed a decade ago with 30,000 job losses.

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The department store's chief executive, Alex Williamson, has said that the closure of 31 of House of Fraser's 59 stores was the "only viable option" to secure the future of the business.

"Apart from needing an urgent cash injection, the true heart of the problem for House of Fraser is outdated stores and an even more outmoded website".

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