A credit insurer has pulled cover on House of Fraser, underscoring the difficulties faced by the department store following a disappointing set of Christmas figures. A spokesperson for House of Fraser said 20 of the business’ 650 suppliers would be affected by the credit insurer’s decision. Those suppliers will now have to find new insurance, or may demand upfront payments for their goods from House of Fraser.
The store group posted very disappointing Christmas sales in January after it cut the number of promotions and online sales have fallen by some 7.5% over the Christmas trading period. Concerns for the department store are mounting after it wrote to landlords last month asking for rent reductions, sparking concerns over its finances.
It is also reportedly looking into selling off or reducing the size of failing department stores amid falling sales. House of Fraser has 58 stores across the UK and three overseas.
Of course it is not just House of Fraser suffering current reversals but more disappointing results are expected for the High Street this week, as losses at fashion chain New Look are predicted to increase even further amid turnaround efforts.
Expected losses could grow to between £5m and £10m for the last nine months of the year according to reports, compared to a £111.5m profit reported a year ago. New Look has been losing sales in recent months after a questionable move by former chief executive Anders Kristiansen to focus on selling clothes to a younger audience which alienated its older long-standing customers.