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House of Fraser: Downfall of retail giant founded in Glasgow

The high street chain has revealed plans to shut nearly half its stores across the UK.

House of Fraser: 127 jobs at Edinburgh store at risk.
House of Fraser: 127 jobs at Edinburgh store at risk. PA

The company that would eventually become House of Fraser began life as a sole drapery shop in Glasgow in 1849.

It would go from strength to strength over the next 170 years, becoming one of the UK's most recognisable retail brands with nearly 60 stores.

But not even House of Fraser has been able to resist the tide that has decimated high streets around Britain, as shoppers' habits have changed with the rise of the internet.

The firm has now announced restructuring plans which would close 31 of its 59 stores, including one in Edinburgh, potentially impacting 6000 jobs.

https://stv.tv/news/east-central/1417686-house-of-fraser-department-store-in-edinburgh-to-close/ | default

It joins the likes of department store chains such as New Look, Mothercare and Select Fashion in pursuing Company Voluntary Agreements (CVAs) with creditors to cut costs and reduce debts.

Meanwhile, Toys R Us has gone bust while chains like Maplin and Jaques Vert are in administration and closing stores.

Debenhams has also recently announced a major overhaul of its warehouses and stores amid sliding profits, potentially jeopardising hundreds of jobs.

But of all these companies, House of Fraser may be the most illustrious brand yet to try and cut its way out of trouble.

History

Chain: House of Fraser store on Victoria Street in London (file pic).
Chain: House of Fraser store on Victoria Street in London (file pic). PA

That drapery shop was opened 170 years ago by Hugh Fraser and James Arthur on the corner of Argyle Street and Buchanan Street in Glasgow.

It would be renamed from Arthur & Fraser to Fraser & Sons in 1891.

The firm grew steadily during the early 20th century, acquiring a number of Scottish stores and becoming House of Fraser in 1941.

After the Second World War, several acquisitions transformed the company into a national chain.

It bought the business Binns Ltd in 1953, extending its reach to the north-east of England.

But it was the purchase of Harrods in 1957 that really transformed House of Fraser into a nationwide powerhouse.

New owners

Mohamed Al-Fayed: Egyptian tycoon took over firm in 1980s.
Mohamed Al-Fayed: Egyptian tycoon took over firm in 1980s. © Alfayed.com

As the company continued to grow, it eventually came under new ownership.

Egyptian-born billionaire Mohamed Al-Fayed took over House of Fraser in 1985, and in 1994 it became a public limited company (PLC), floated on the stock exchange for £484m.

By the end of the millennium it had launched a range of "house brands", including menswear, womenswear and homeware.

In 2003, the Jenners and Beatties department store chains became part of the House of Fraser brand, including the Jenners store in Edinburgh, which will not be affected by the coming cuts.

As recently as 2013, it was heralding the launch of its first international store in Abu Dhabi and achieved record Christmas sales in 2014.

That same year, House of Fraser was bought by Chinese conglomerate Sanpower Group for £480m.

Trouble

https://stv.tv/news/uk/1405732-fears-for-house-of-fraser-after-bid-to-reduce-rents/ | default

Like other retailers, House of Fraser has struggled over the past few years.

With stiff competition from online rivals and a slump in consumer confidence, Sanpower was forced to seek outside help in the form of a stake sale to Hamley's owner C.banner.

The Chinese owners have also increasingly been focusing on the company's online business.

Before today's announcement, the group had 59 locations across the UK and Ireland, and employed around 5000 people directly and 12,500 concession staff.

Jobs will be cut significantly, with closures set to affect up to 2000 staff and a further 4000 concession workers.

The plans will put all 127 of the jobs located at the Princes Street store at risk, both direct employees and concession staff.

They join the estimated 21,000 workers whose jobs have been put at risk this year already across the retail industry.

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