LONDON– On Wednesday a rescue deal for British retailer House of Fraser was thrown into doubt after C.banner canceled planned fundraising for its deal to become a majority shareholder in the department store.
C.banner, an international retailer, had agreed in May to buy a 51 percent stake in House of Fraser but earlier on Wednesday, it canceled a planned share placing that would have funded the deal and announced a profit warning. House of Fraser said talks about other possible sources of investment were ongoing, and that an update would be given when appropriate.
C.banner, a major retailer of mid-range to premium footwear brands in China, bought famous London toy shop Hamleys in 2015. “In light of C.banner’s announcement… House of Fraser is in discussions with alternative investors and is exploring options to obtain the required investment on the same timetable,” the 169-year-old retailer said in a statement.
A string of UK retailers has either gone out of business or announced plans to close shops in recent months as they struggle with subdued consumer spending, rising labor costs and higher business property taxes as well as growing online competition. House of Fraser had agreed to close stores as part of the rescue deal, and in June creditors approved a restructuring plan which would see 31 of its 59 stores close early next year and pave the way for the loss of 6,000 jobs.