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House of Fraser calls in administrators | House of Fraser calls in administrators |
(35 minutes later) | |
House of Fraser is appointing administrators after giving up the fight to save the business, putting thousands of jobs at risk. | |
In a statement, the department store chain said that talks with investors and creditors had "not concluded in a solvent solution". | |
However, all 59 shops are set to open as usual on Friday, including 31 that have already been marked for closure. | |
House of Fraser employs 17,500 people, including 11,500 concession staff. | House of Fraser employs 17,500 people, including 11,500 concession staff. |
The retailer's website was down on Friday, with a message that it would be "back up and running as soon as possible". | |
House of Fraser said administrators Ernst & Young had confirmed that the business would continue trading, including all stores and offices, while they attempted to complete a sale. | House of Fraser said administrators Ernst & Young had confirmed that the business would continue trading, including all stores and offices, while they attempted to complete a sale. |
Its fate was sealed earlier this month, when Chinese firm C.banner pulled out of a rescue deal. | |
The firm said: "Significant progress has been made towards completing a sale of the group's business and assets. | The firm said: "Significant progress has been made towards completing a sale of the group's business and assets. |
"The proposed administrators are expected to continue to progress those discussions with a view to concluding a transaction shortly after their appointment." | "The proposed administrators are expected to continue to progress those discussions with a view to concluding a transaction shortly after their appointment." |
What is administration? | What is administration? |
Administration is a formal procedure that happens when a company becomes insolvent - that is, its debts are bigger than its assets | Administration is a formal procedure that happens when a company becomes insolvent - that is, its debts are bigger than its assets |
The unfortunate firm is put under the management of insolvency practitioners | The unfortunate firm is put under the management of insolvency practitioners |
Once an administration order is granted, all legal action against the insolvent company is frozen for a period of about eight weeks | Once an administration order is granted, all legal action against the insolvent company is frozen for a period of about eight weeks |
During that time, the administrator can draw up a plan of action and propose it to creditors during a creditors' meeting | During that time, the administrator can draw up a plan of action and propose it to creditors during a creditors' meeting |
The administrator takes control of all assets and business operations | The administrator takes control of all assets and business operations |
Its aim is to act in the best interest of the firm's creditors, in order to repay as much as possible | Its aim is to act in the best interest of the firm's creditors, in order to repay as much as possible |
Chief executive Alex Williamson said: "We are hopeful that the current negotiations will shortly be concluded. An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength. | Chief executive Alex Williamson said: "We are hopeful that the current negotiations will shortly be concluded. An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength. |
"In the two weeks since the Cenbest and C.banner transaction ceased, the directors have brought forward a number of potential buyers and the group's financial advisers have run a comprehensive M&A process to identify and then develop other third-party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace." | "In the two weeks since the Cenbest and C.banner transaction ceased, the directors have brought forward a number of potential buyers and the group's financial advisers have run a comprehensive M&A process to identify and then develop other third-party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace." |
Chairman Frank Slevin said: "This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan. | Chairman Frank Slevin said: "This has been an extraordinarily challenging six months in which the business has delivered so many critical elements of the turnaround plan. |
"Despite the very recent termination of the transaction between Cenbest and C.banner, I am confident House of Fraser is close to securing its future." | "Despite the very recent termination of the transaction between Cenbest and C.banner, I am confident House of Fraser is close to securing its future." |