Bournemouth's House of Fraser store earmarked for closure

The department store on Old Christchurch Road is one of 31 branches facing the axe, with up to 6,000 jobs under threat nationwide.

The local store – previously called Brights of Bournemouth and then Dingles – can trace its history to 1871.

Moves to close almost half the 59 House of Fraser stores are a condition of a Chinese investor taking a 51 per cent stake in the struggling company. If the plan is approved, the stores are expected to shut in early 2019.

House of Fraser chairman Frank Slevin said: “The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.

“Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business. So whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”

Other stores earmarked for closure include the flagship branch in London’s Oxford Street and stores in Birmingham, Cardiff and Plymouth.

Julie Palmer, regional managing partner with the business recovery specialist Begbies Traynor, said: “With somewhere like Bournemouth, they probably looked at the general market in the town and whether that is where the shoppers will want to go or whether the town centre is going through a transformation where footfall is falling off.”

She said the “relative proximity” of West Quay in Southampton could have been a factor.

“Shoppers like these big covered malls with covered parking, cinemas and restaurants. Southampton being just half an hour away, that’s probably seen some of the footfall away from Bournemouth,” she said.

Tony Brown, chief executive of Bournemouth-based Beales, said: “It’s always sad to see a retailer go. The vibrancy of the town relies on a good strong mix of brands.

“A number of the brands that are in House of Fraser have approached us, so I don’t think there will be a net loss of brands in the town centre, but it’s another empty space which we need to deal with should they go.

“It’s sad for the people in House of Fraser but some of the people in the concessions will come across as well. The net effect, I don’t think, will be a big loss.”

Cllr Nigel Hedges, Bournemouth council’s business champion, said people needed to “cherish” the town’s department stores.

“Everybody’s using their thumbs to kill the high street and we know they are showroom shopping. It’s delivered by Jiffy bag at home. We’re here for emergency purchases when the Jiffy bag is lost or the item isn’t what they were expecting,” he said.

“Any business that fails is a sad thing because it means people are out of a job and we’ve lost another offer,” he added.

He said work was being done by the Town Centre Business Improvement District to draw people into town, while the council had a Retail Round Table forum to promote dialogue with the industry.

The closures are being proposed under a company voluntary arrangement (CVA) which will go before creditors on June 22.

How firms agree store closures

A FEW years ago, hardly anyone had heard of a company voluntary arrangement, or CVA.

But a succession of big-name retailers have now used this procedure to try and fend off a collapse into administration.

BHS, Beales, Toys R Us, Mothercare, Carpetright and New Look all sought CVAs as a way of cutting costs. For BHS and Toys R Us, the measure was not enough to avoid administration.

For a CVA to go ahead, at least 75 per cent of creditors must back proposals which involve landlords accepting lower rents on under-performing sites. Store closures are often part of the deal.

But the British Property Federation has called for an urgent review of CVAs. Critics fear retailers seek them too readily to increase their margins.

Julie Palmer of Begbies Traynor said when companies go into administration, there is rarely any return for shareholders – whereas CVAs tend to restore some value for those shareholders.

And while landlords are sometimes portrayed as villains in the high street, she notes: “I think the point worth remembering through this is the landlords often will be pension funds – so it’s actually the man in the street that might be affected by this through their pension fund holding.”

House of Fraser was once an institution 

IT’S never a good sign for a retailer when the staff outnumber the customers.

At 10.30am, it was admittedly early in the shopping day, but there were no more than 10 shoppers on the four floors of House of Fraser.

There was no shortage of attractive merchandise from famous brands such as Jaegar, Coast, French Connection and Barbour. But the staff, who were busy processing the news that their jobs were likely to go, had almost no one to sell to.

As the ornate staircases and the iron frontage signal, the building has traditionally been one of Bournemouth’s grand department stores.

Its story begins in 1871, when Frederick Bright opened a shop selling needlework and wool at the Arcade. He expanded into neighbouring shops in the Arcade, then into the adjacent building in what is now Old Christchurch Road. The store’s distinctive towers and iron facades have helped it status as a grade two listed building.

Bright’s of Bournemouth was later bought by Dingles, which in turn became a division of House of Fraser. The Dingles brand name disappeared in 2006.

In recent years, House of Fraser – largely owned by Chinese group Sanpower – has amounted £390m in debts. It was seeking to refinance £225m which is due for repayment in July 2019.

Those national problems look like costing Bournemouth a store that was an institution for generations.