House of Fraser’s China rescue plan collpases

C Banner International, a Hong Kong-listed Chinese Fashion group, that also owns toy shop Hamleys abandoned plans to rescue House of Fraser, which was founded as a Glasgow draper in 1849, one of the UK’s oldest best-known retail chains. The Chinese company said it was “impracticable and inadvisable” to proceed with acquiring controlling stake in the department store, which could have given the company a £70m lifeline, as the price of their shares collapsed last month.

House of Fraser which employs 5, 000 directly and  12,500 through in-store concessions, with 6000 of these jobs set to be axed, said, it was in discussions with alternative investors and is exploring the option to obtain the required investment on the same timetable.

 House of Fraser has been badly hit by a drop in high street shopping visits as more people buy online. It creditors approved a recovery plan in June involving the closure of 31 of its 59 stores under a CVA that would see a sharp fall in its rent costs. Last year, the company lost nearly £44m as pressure mounted on the business.

C banner was to have acquired 34 per cent of House of Fraser for £7.16m and subscribe to £70m of new House of Fraser group shares, giving it a total stake of 51 per cent.

Philip Day, based in Dubai, owner of high street brands Jaeger, Austin Reed, Jane Norman, Peacocks, and Edinburgh Woollen Millis exploring a bid for the troubled department store chain.