Beatties owner plans restructuring
Embattled department store chain House of Fraser, which includes Wolverhampton's Beatties, has appointed KPMG to advise on a restructuring plan for the business which could involve store closures and job losses.
The retailer, which is owned by Chinese conglomerate Sanpower, has drafted in advisers to look at a range of options, one of which could be an insolvency procedure known as a Company Voluntary Agreement.
Several retailers have pursued CVAs to save on costs this year. The procedure would involve House of Fraser seeking agreement from landlords to cut rents and possibly shutting some of its 56 UK stores.
House of Fraser has 6,000 employees and 11,500 concession staff at its sites in the UK, which also include Beatties in Solihull, Rackhams in Shreesbury and stores in Birmingham and Telford..
However, the department store chain has not yet decided what form of restructuring it will opt for. The company is due to detail its turnaround plan in the coming weeks.
House of Fraser's troubles came to the fore in January after it suffered a drop in sales over Christmas.
The business has already started talking to landlords to reduce the size of its stores in a bid to cut its rent bill.
Sanpower chairman Yuan Yafei has voiced his commitment to House of Fraser and has been pumping millions of pounds into the retailer to keep it on an even keel.
House of Fraser's woes comes at a torrid time for the retail sector, with thousands of jobs lost already this year.
Toy R Us was one of the most high-profile retail casualties in the first quarter, with electronics retailer Maplin also going into administration on the same day.
Retailers including New Look and Carpetright have opted for CVAs this year, putting hundreds of jobs in doubt.
Restaurant chains have also been hit by a squeeze on consumer spending. Byron, Jamie's Italian and Prezzo have all announced plans to shut stores as part of restructuring plans.
Mothercare, Debenhams and Homebase are also under intense pressure.
High street retailers have been battling against a combination of rising costs, fall in consumer confidence and online competition.
Sanpower bought House of Fraser in 2014, but the deal has since proved ill-fated, with UK trading under pressure and little success in its plans to launch department stores worldwide. House of Fraser reported a 2.9 per cent fall in sales in the crucial six weeks to December 23, while online sales fell 7.5 per cent after hiccups with the launch of a new web platform.
The group had planned to expand the chain internationally, with 50 House of Frasers planned across China under the name Oriental Fraser.
But it has only opened one House of Fraser in China - a store in Nanjing in late 2016.
The landmark Beatties in Wolverhampton city centre was opened in 1887 by James Beattie and became the cornerstone of a 12-strong department store empire. At its height in the 1980s and 1990s, the Wolverhampton store alone employed more than 800 people. It was taken over by House of Fraser in 2005.
