House of Fraser’s Chinese owner Sanpower has pledged to grant the department store a £15 million cash injection to stabilise its finances.
According to The Guardian, Sanpower is poised to reiterate its support for the retailer, of which it owns an 89 per cent stake, despite confirming earlier this month that it was looking to offload its majority share to Wuji Wenhua.
“We at Sanpower continue to support House of Fraser as it embarks on a year of significant transformation in 2018,” a Sanpower spokesperson said.
“Sanpower, through the listed company, has invested £45 million in House of Fraser and plans to inject further capital.”
This further capital is expected to come in the form of a £15 million boost later this week.
Subsequently, House of Fraser chief executive Alex Williamson has written to suppliers ensuring them that business would continue as usual.
The news comes after talks between the House of Fraser and Alteri to secure £40 million in funding collapsed.
It is understood that the department store’s assets may have already been pledged against its substantial £400 million debt pile, leading to a major turnaround specialist Alteri to walk away from negotiations.
The past few months have been especially difficult for House of Fraser, which recorded a slump in Christmas sales, had its credit rating downgraded, sought to reduce rents through talks with landlords, and drafted in Rothschild to help refinance its debt package.
House of Fraser currently employs around 6000 staff across 59 stores and a further 11,500 staff among its concessions.