Department store group House of Fraser has held refinancing talks with Alteri Investors as fears grow over its financial condition.
According to The Sunday Times, House of Fraser executives met with Alteri, an investor firm that specialises in turnarounds for struggling retailers, with the aim of securing around £40m of funding.
However reports suggest the talks collapsed because the company had already staked all of its core assets as collateral against existing debts. In an attempt to allay concerns a spokesperson for House of Fraser said: “[We are] a privately owned business. We have the full financial support of our shareholders.”
The group, which was acquired by Chinese investment firm Sanpower for £450m in 2014, lost £9m last year and sales over the festive period fell by 2.9%. As a result Sanpower has agreed to sell 51% of its stake in the department store earlier this month to fellow Chinese firm Wuji Wenhua. This would leave Sanpower with a a 38% stake in the British retailer.
The news also comes after it was reported House of Fraser’s banks had hired EY, the professional services group, to assess the retailer’s financials as well as the chances of them recovering its loans.