The slump was attributed to Brexit, London’s terrorist attacks and the ‘rapidly evolving’ retail market. The document was submitted to the Hong Kong Stock Exchange, where C.Banner announced its acquisition of the House of Fraser.
The figures include the company’s two Chinese outlets and includes the launch costs of the stores in Nanjing and Xuzhou. This also accounts for the fees paid to use the House of Fraser name abroad.
The document said:
The Brexit referendum and the UK’s resultant decision to leave the European Union and the terrorist attacks in London, combined with a rapidly evolving retail market, produced a period of uncertainty and volatility that resulted in a difficult trading environment for the whole retail industry in the UK.
Nevertheless, the Directors believe that as a leading department store chain in UK, the Target Group will be able to take advantage of its well-known brand to capture growth potential.
Also, upon completion of the Restructuring Plan, the business operation, profitability and cash flow of the Target Group will further be improved and therefore the business model of the Target Group is expected to become more stable.
The UK leg of the company is expected to release its financial results for the year ending 31 December 2017 soon.
Chinese company C.Banner, which also owns Hamleys, recently acquired a 51% stake in the department store giving it majority ownership.
House of Fraser is expected to make its CVA proposal next month with an unknown number of its 59 stores facing closure.