House of Fraser has appointed KPMG to advise on a restructuring strategy as it considers a company voluntary agreement.
The struggling department store has not yet made it clear which form of restructuring it will opt for, but a fully-fledged restructuring plan will reportedly be released from the retailer in the coming weeks.
CVA’s has become a popular method of staving off administration for embattled companies in the last few months, allowing companies to offload their underperforming stores and reduce rents while avoiding administration.
As House of Fraser has already begun in engaging talks with landlords to reduce its estate and cut rents, a CVA is a likely outcome. If the process was to go through some if the retailers 6000 employees and 11,500 concessions staff would likely be made redundant.
This comes after talks between House of Fraser and Alteri to secure £40 million in emergency funding collapsed last month.
It is understood that the department store’s assets may have already been pledged against its substantial £400 million debt pile, leading to major turnaround specialist Alteri to walk away from negotiations.
Sanpower, which owns an 89 per cent stake in the store, has already given it a £30 million cash injection.
House of Fraser has announced a string of troubling financial news since the start of the year, following a 2.8 per cent drop in sales of the vital Christmas period.
In February credit insurers cut ties with the retailer refusing to cover its suppliers over fears it could go under. Weeks later it hired Rothschild to help it restructure its massive debt pile, and last month its owner announced its was seeking to offload a 51 per cent stake of the company.