Department store chain House of Fraser has posted a loss of almost £44m for 2017 as sales tumbled.
The chain’s new Chinese owner, C.Banner, said the loss of £43.9m reversed a pre-tax profit of £1.5m for the previous year, while sales fell 6.3% to £787.8m.
C.Banner blamed Brexit, terror attacks in London and online competition for the poor performance.
The Chinese retail group recently took a 51% stake in House of Fraser.
The extent of the chain’s financial problems were revealed in a document submitted by C.Banner to the Hong Kong Stock Exchange announcing the acquisition of the stake in House of Fraser.
“The Brexit referendum and the UK’s resultant decision to leave the European Union and the terrorist attack 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.”
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However, C.Banner said House of Fraser would become “more stable” after completing its restructuring plan and “take advantage of its well-known brand to capture growth potential”.
C.banner took control of the retailer from another Chinese firm, Nanjing Cenbest. Store closures are planned and the chain wants to renegotiate rents on others.
In its stock market statement C.Banner said it hoped its House of Fraser stake would result in cost savings in its footwear and toys businesses, as well as in administrative functions.
The firm also said both House of Fraser and Hamleys, which it also owns, could negotiate better deals with suppliers.
The figures include the start-up and operating costs of House of Fraser China, but exclude the licence fee payable from the Chinese business to House of Fraser UK for the use of the name in that market.
Source: BBC News