House of Fraser’s relations with a range of stakeholders worsened today after several landlords expressed anger at proposed rent reductions as part of an ongoing CVA plan.
Landlords are said to be peeved by the request for rent reduction after fresh investment by Hamley’s owner C.banner.
Several landlords told media the retailer failed to speak with them before announcing plans for a CVA, while House of Fraser requires a 70% approval rate from landlords for the CVA to go ahead in its current form.
However, stock exchange rules in Hong Kong and China, where House of Fraser’s parent company Sanpower is incorporated, dictate that retailers are prohibited from sharing this information ahead of agreements being struck.
Landlords’ anger this morning was further undermined after sources close to CVA discussions told Retail Sector the plans are yet to even be put to a vote with landlords – a vote which could successfully overturn the proposed deal.
Retail Sector understands from a source close to management that representatives from the struggling department store met with landlords to discuss the CVA earlier this month, just after some landlords had slammed the plans due to proposed rent reductions.
A spokesman for House of Fraser would not make an official statement when asked about the landlord objections this morning.
Earlier in the week, Sports Direct owner Mike Ashley has said his firm was “repeatedly denied information to which it is legally entitled” by House of Fraser, saying he felt “frozen out” of discussions.
It is however now understood that the particular corporate structure of House of Fraser means there exists no regulatory obligation for House of Fraser’s parent company to inform Mike Ashley or other minority stakeholders of the deal being constructed.