House of Fraser risks collapse as rescue falls through

1st Aug 2018 16:07

(Sharecast News) - House of Fraser faces an uncertain future with a high risk of collapse after its potential new Chinese owner C.banner pulled out of the rescue.C.banner had been planning to acquire a controlling 51% stake in the struggling chain as well as injecting £70m of cash. The announcement was made on 16 May of 2018.But today it said it would not be going ahead with the investment, putting the department store's future at risk once again.In July, C.Banner had already said it was delaying the investment until legal proceedings with landlords over the department store's Company Voluntary Arrangement were resolved.House of Fraser is already planning to cut 31 of its 59 stores, with the loss of 6,000 jobs expected to cut costs and save money. The company currently employs 17,500 people - 6,000 direct and 11,500 concession staff.In a statement, House of Fraser said: "In light of C.banner's announcement (and as per House of Fraser's previous statement to the Luxembourg Exchange), House of Fraser is in discussions with alternative investors and is exploring options to obtain the required investment on the same timetable."Discussions are ongoing and a further announcement will be made as and when appropriate."On Monday, it was revealed that House of Fraser had been approached by Sports Direct founder Mike Ashley over a new investment deal that would provide a £50m loan. The sports chain already owns an 11.1% stake in House of Fraser.