Friday 17 August 2018

Retail giant House of Fraser seeks to reduce rental payments

The chain reported losses in September.

House of Fraser is aiming to pay less rent (Lewis Whyld/PA)
House of Fraser is aiming to pay less rent (Lewis Whyld/PA)

By Catherine Wyatt, Press Association

Department store House of Fraser is seeking a reduction in some of its rents, the retailer confirmed.

A spokeswoman for the company told the Press Association: “We can confirm that we have contacted some of our landlords asking for their support as we drive forward with our transformation programme.”

In September House of Fraser came under strain after the launch of a new web platform and “significant discounting” took its toll.

The chain said half-year earnings sunk to an £8.6 million loss, down from a £900,000 profit in 2016, as website sales suffered from the roll-out of a £25 million online sales platform.

Gross profits also slipped 5% to £196.9 million over the period, as the group slashed prices on old stock to pave the way for a new womenswear brand.

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Shopping stock

The news that it would be seeking rent reductions came after competitor Debenhams issued a profit warning earlier in the week.

In a trading update brought forward from next week, the retailer said UK like-for-like sales tumbled 2.6% in the 17 weeks to December 30, with overall group sales down 1.8%.

The retailer made the warning after it slashed prices to boost flagging sales over the festive period amid “competitive and volatile” trading.

Press Association

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