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sancho panza

House of Fraser shuts 31 stores,6000 jobs at risk.

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Mentioned in the deflation thread

 

Landlords have a choice

1) take a reduced rent

2) take no rent.

 

https://www.theguardian.com/business/2018/jun/07/house-of-fraser-to-close-more-than-half-of-its-british-stores

House of Fraser is to close 31 stores, more than half of its UK chain, putting a further 6,000 retail jobs at risk and dealing another hammer blow to British high streets.

The struggling department store group’s Oxford Street flagship in London and outlets in cities including Birmingham, Cardiff and Edinburgh are among those facing closure. The drastic cuts form part of a rescue plan that will also lead to the company moving out of its head offices in London and Glasgow.

The 31 outlets would close by early next year under a company voluntary arrangement (CVA), a form of insolvency that enables a business to rearrange deals with landlords. Creditors are set to vote on the deal, which includes reducing rents by 25% at 10 other stores, on 22 June.

The House of Fraser chairman, Frank Slevin, said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive. Our legacy store estate has created an unsustainable cost base, which, without restructuring, presents an existential threat to the business.

“So while closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”

The restructuring is a condition of a deal that will give control of House of Fraser to the Chinese owner of Hamleys.

C.banner is buying a 51% stake in the parent group of the ailing department store group for £140m, leaving the current owner, Nanjing Cenbest, part of China’s Sanpower conglomerate, with a minority stake.

House of Fraser’s CVA comes after a string of retailers and restaurant groups have used the process to close outlets, including Mothercare, Carpetright, New Look and Jamie’s Italian.

 

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Given that a CVA needs 75% support to go through and they have annoyed 31 of their 59 landlords will see nothing from this deal except an empty building I cannot see the vote on the 22nd being a Yes. 

Especially as I suspect Mike Ashley the other (11%) shareholder of HoF is on manoeuvres ..

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1 hour ago, eek said:

Given that a CVA needs 75% support to go through and they have annoyed 31 of their 59 landlords will see nothing from this deal except an empty building I cannot see the vote on the 22nd being a Yes. 

Especially as I suspect Mike Ashley the other (11%) shareholder of HoF is on manoeuvres ..

75% of its creditors, by debt owed.

A lot of its creditors will be suppliers and the LA.

And the pension fund etc etc.

 

The dumb arse idea of upward only rent reviews on commercial lets brought this about.

Tought tits.

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My Wife is a concession area manager and her company sells many of their products through House of Fraser,luckily her company pulled out of most of the loss making stores 18 months ago,hopefully the vote goes through and she can  keep her job for a bit longer.

Apparently this is all down to Brexit rather than greedy Councils who actively discourage shoppers with their inflated car parking charges.

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I remember Kendalls (HOF-connected and later HOF-owned with traditional green and gold logo) in Manchester when I was a kid it was proper toffee-nosed posh. People like me were allowed in but had to be on best behaviour.  Strange to think it has turned into tat bazaar to be closed down.

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Definitely we're chasing the US where this has been going on for some years now (dead malls et al).  What next john Lewis shutter up stores?  That would surely proceed a national Day of mourning (to be fair I respect their co-op business model but has to be said we really went all out in making consumerism high Street retail a national obsession).  Truly my heart bleeds for the houses of Fraser that I've vaguely a recollection of visiting despite being very close for a number of decades.  

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10 hours ago, Dogtania said:

Definitely we're chasing the US where this has been going on for some years now (dead malls et al).  What next john Lewis shutter up stores?  That would surely proceed a national Day of mourning (to be fair I respect their co-op business model but has to be said we really went all out in making consumerism high Street retail a national obsession).  Truly my heart bleeds for the houses of Fraser that I've vaguely a recollection of visiting despite being very close for a number of decades.  

Next is Debenhams.

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14 hours ago, Dogtania said:

 What next john Lewis shutter up stores?  That would surely proceed a national Day of mourning...

Gone Lewis.

Andy Street leaving was a flag.

Like M&S the present reality no longer fits with the perception earned over decades for the ageing typical JL shopper.

Reputations can be lost really quickly. C4 Supershoppers recently featured the ' never knowingly undersold' policy, previously an open secret.

We took a neighbour to buy a smart TV. The JL we visited had a 40 something woman assistant, very smiley but hopeless. Couldn't answer any questions, pretty much suggested we do our research at a 'specialist' or 'internet' then come back and they'll beat the price, or match it at least, plus have a 5 year guarantee.

The old folks were attracted to that idea, we trust JL.

They mostly don't do their own repairs anyway, they outsource to a third party.

We ended up at Richer Sounds, young enthusiastic chap, knew the products inside out, lower prices, and they also gave a 5 year guarantee.

I'm guessing JL have had a good thing going for a long time. Advertise to match price and include a 5 year guarantee. Match the price when it suits them, or not, if it doesn't. Their staff didn't need specialist advice, they had shoppers finding out what they needed elsewhere or from internet forums, then match prices and swing it with a better guarantee.

Trouble is the specialist AV stores have mostly gone, and Currys PC World now also gives 5 year guarantees. The staff in Currys can push their 'exclusive'  models, whilst there is nobody at JL with the interest or product knowledge to sell their alternative. Too many part-time Mums.

That's just one example, there's plenty of others.

The partnership bonus is low, has been for a while. They could just pay a higher salary. It's bollocks.

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@Bedrag Justesen. My experiences quite similar.  I still hold John Lewis with high regard for some reason but I think that is some kind of unconscious remnent from a bygone era.  Recently my dad bought a pc from them and after a couple of months the PSU failed... They sent it back for repair and obviously wasn't their fault but he was without it for almost 2 months.  I know he hasn't had great experiences previously either getting blinds but them telling him something completely wrong in store so needed full return on install day.  

In the store near me I personally find the staff a bit uppidty but maybe it's just a knock on affect from dealing with uppidity pensioners all day.  All I really buy are occasional birthday cards or wrapping paper.  I still have gift card somewhere I should spend... Thought some clothing but £50 you struggle to find a t-shirt.

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There was quite a fanfare when House of Fraser opened up in Norwich at the brand new Chapelfield shopping centre in 2005. They occupy the largest unit at the far end of the mall, over 3 floors.

I got a job as a courier at the same time it opened and one of my clients was this House of Fraser. They decided to change their 'goods received' policy shortly after by refusing any deliveries after 11am which inconvenienced me at the time but I thought smacked of arrogance.

I've walked around the store a few times but always found their stuff hellishly pricey. Never bought a single item there.

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16 hours ago, Bedrag Justesen said:

Like M&S the present reality no longer fits with the perception earned over decades for the ageing typical JL shopper.

+1  And like with M&S, offers an opportunity to clearly observe such human behaviour (retention bias?).  And see it all over the place (BBC?  Charities? etc).  Helps keep me grounded in my investing.

 

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Posted (edited)
21 hours ago, dgul said:

Next is Debenhams.

☺️ You just made me realise that with all this talk of HOF, I had actually been picturing and nattering on about Debs by mistake! ☺️

Edited by No Duff

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John Lewis is one of the few big name high-street shops which can be relied upon in the quest for a present that is a bit special (e.g. A handmade in UK photo frame, hand-made designer vases etc). Unless I'm looking for a perfume, cosmetics or clothing, it is JL all the way and independents. So I hope they continue.

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On 07/06/2018 at 22:41, satch said:

This is devastating, it is ripping the heart out of the shopping centres in many towns. I feel bereft as if my heart has been ripped out. Life will never the the same again. I will miss the wonderful Christmas decorations and windows displays but I guess this is the end of the golden era of retail. I have tears rolling down my cheeks, tears of regret ... I never went in there or bought anything but I will miss it.

I remember back in the day buying Compact Discs (or CDs as they were called back then) from a physical music store called HMV. You would walk in and there would be huge stands all over the place full of Compact Discs arranged by genre and alphabetised. Truly an amazing sight. They played banging music all the time and the place was like a disco full of adolescents. My school mates and I would spend hours rifling through all the many CDs, often not buying any because they cost about £150 in those days.

If you were lucky enough to have saved for months and could afford to buy a CD you would go to the "check out" which was another stand with a "till" (basically a really old computer) on. The check out would have to be manned by an actual person and it was nice saying "Hi" to them. Sometimes they would congratulate you on your purchase (both the being able to afford it and in my case, my excellent taste in music - buying a Velvet Underground album when aged 16 marks you out as elite, in music taste terms). Then you would hand over your £150 and the check out operator would plop your CD in a lovely HMV plastic bag so all your mates would know you had been lucky enough to buy a CD there:

"HMV? What did you buy Billfunk?" They would ask

"The Velvet Underground by The Velvet Underground" I would say

"That's Gay" They would reply.

Great Times and I still have some of my old CDs to this day, though they are only worth £3 nowadays! Maybe one day, if they still have these physical shops anywhere I would like to walk into one again, stand there for hours pissing about, then physically exchange cash for a product whilst having a bit of conversation with a "check out operator".

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1 hour ago, billfunk said:

I remember back in the day buying Compact Discs (or CDs as they were called back then) from a physical music store called HMV. You would walk in and there would be huge stands all over the place full of Compact Discs arranged by genre and alphabetised. Truly an amazing sight. They played banging music all the time and the place was like a disco full of adolescents. My school mates and I would spend hours rifling through all the many CDs, often not buying any because they cost about £150 in those days.

If you were lucky enough to have saved for months and could afford to buy a CD you would go to the "check out" which was another stand with a "till" (basically a really old computer) on. The check out would have to be manned by an actual person and it was nice saying "Hi" to them. Sometimes they would congratulate you on your purchase (both the being able to afford it and in my case, my excellent taste in music - buying a Velvet Underground album when aged 16 marks you out as elite, in music taste terms). Then you would hand over your £150 and the check out operator would plop your CD in a lovely HMV plastic bag so all your mates would know you had been lucky enough to buy a CD there:

"HMV? What did you buy Billfunk?" They would ask

"The Velvet Underground by The Velvet Underground" I would say

"That's Gay" They would reply.

Great Times and I still have some of my old CDs to this day, though they are only worth £3 nowadays! Maybe one day, if they still have these physical shops anywhere I would like to walk into one again, stand there for hours pissing about, then physically exchange cash for a product whilst having a bit of conversation with a "check out operator".

Water painting or it never happened.

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On 07/06/2018 at 16:26, M S E Refugee said:

My Wife is a concession area manager and her company sells many of their products through House of Fraser,luckily her company pulled out of most of the loss making stores 18 months ago,hopefully the vote goes through and she can  keep her job for a bit longer.

Apparently this is all down to Brexit rather than greedy Councils who actively discourage shoppers with their inflated car parking charges.

Local clowncil here is berating falling footfall in the town centre. In the last month or so, they have given planning permission to 2 small out of town retail developments. I guess it would be a bit far fetched to suggest one (or two) might take trade from the other though. 

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On 08/06/2018 at 00:08, Dogtania said:

Definitely we're chasing the US where this has been going on for some years now (dead malls et al).  What next john Lewis shutter up stores?  That would surely proceed a national Day of mourning (to be fair I respect their co-op business model but has to be said we really went all out in making consumerism high Street retail a national obsession).  Truly my heart bleeds for the houses of Fraser that I've vaguely a recollection of visiting despite being very close for a number of decades.  

I did read on zerohedge? a month or so back, despite all the closures, there is more retail space in use in the US currently than ever in history. Its just far more big box stores/out of town and expanding in some states (ie Texas, Nevada) and falling in others.

 

I mean, half the units in one town local to me seem to be empty, but then the recently built Tescos probably has more floor space than all those combined (and is about double the size of the original Tescos, opened in 1988)

Personally I hate the place, but clearly most do not .

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On 07/06/2018 at 22:41, satch said:

This is devastating, it is ripping the heart out of the shopping centres in many towns. I feel bereft as if my heart has been ripped out. Life will never the the same again. I will miss the wonderful Christmas decorations and windows displays but I guess this is the end of the golden era of retail. I have tears rolling down my cheeks, tears of regret ... I never went in there or bought anything but I will miss it.

lol, reminds me of one of these 'save our pub' programs on telly from 8 or 9 years back. 

 

Village of 4000. Pub freeholder agreed to sell to the community for knock down price of £80,000. ie, £20 per resident. Suddenly all those thousands who signed the petition lost interest and decided they'd rather keep the £20. Don't think more than a few dozen were prepared to part with £20. 

I remember thinking at the time, £20 is less than a round of drinks. Clearly they werent that bothered about losing their 'community hub' 

 

I wonder if people got so dramatic when the high street in turn replaced open air markets... 

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1 hour ago, PatronizingGit said:

lol, reminds me of one of these 'save our pub' programs on telly from 8 or 9 years back. 

 

Village of 4000. Pub freeholder agreed to sell to the community for knock down price of £80,000. ie, £20 per resident. Suddenly all those thousands who signed the petition lost interest and decided they'd rather keep the £20. Don't think more than a few dozen were prepared to part with £20. 

I remember thinking at the time, £20 is less than a round of drinks. Clearly they werent that bothered about losing their 'community hub' 

 

I wonder if people got so dramatic when the high street in turn replaced open air markets... 

Happened in our village. About 20 people put up £25k each.

Was bloody impossible to get served as the barstaff would always serve an 'owner' first.

They sold out to a chain for redevelopment after a few years. Wouldn't surprise me if they doubled their money. Bugger.

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On 08/06/2018 at 15:07, Bedrag Justesen said:

We ended up at Richer Sounds, young enthusiastic chap, knew the products inside out, lower prices, and they also gave a 5 year guarantee.

Yes they have been brilliant on the odd occasion I've use them, I still have the pair of celestion floor standing speakers I bought from them 20 years.

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On 05/07/2018 at 20:08, PatronizingGit said:

Local clowncil here is berating falling footfall in the town centre. In the last month or so, they have given planning permission to 2 small out of town retail developments. I guess it would be a bit far fetched to suggest one (or two) might take trade from the other though. 

A new Aldi has opened here recently. There are 2 already. I drove past the new one today. The car park was rammed. Where has this demand come from? Is it new business generated by increasing population/prosperity, are they stealing customers from other stores (there is a very expensive Co-op nearby) or are they cannibalising sales from their existing stores? Do they even know?

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