House of Fraser’s financial health in question as it seeks to reduce rents

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House of Fraser rent

House of Fraser has confirmed it is seeking a reduction in some of its rents, prompting questions about the financial health of the department store chain.

A spokeswoman for the retailer has said it has contacted some landlords asking for “their support” as it prepares to publish its Christmas trading performance.

However, according to sources speaking to the Guardian, while House of Fraser is not planning to close any of its branches, it is reportedly seeking to reduce the size of its stores by around a third.

This includes plans to shut down top floors or basements and would take place over 10 years.

House of Fraser said in a statement: “We can confirm that we have contacted some of our landlords asking for their support as we drive forward with our transformation programme.”

Richard Lim, chief executive at retail insights firm Retail Economics, said the latest news indicated that House of Fraser has “failed to adapt” to changes affecting the UK retail industry.

“The unforgiving shift towards online spending against a backdrop of inflexible leases, upward only rent reviews and spiralling operating costs has put traditional retail business models under intense pressure,” he said.

“Put simply, many retailers are operating with business models that are no longer fit for purpose in today’s digitally-driven world.”

In September, House of Fraser posted a half-year loss of £8.6 million, down from a £900,000 profit in 2016.

Gross profits also slipped five per cent to £196.9 million over the period.

It attributed the results to the £25 million roll-out of a new ecommerce platform as part of its transformation programme, and “significant discounting”.

House of Fraser was acquired by Chinese conglomerate Sanpower Group for £480 million in 2014.

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