House of Fraser’s plan to close scores of stores and slash the rents on other shops faces a backlash from landlords frustrated at the wave of CVAs that have taken place on the high street.
Both the British Property Federation (BPF) and Revo, which represents both landlords and retailers, said members were increasingly unlikely to approve company voluntary arrangements.
House of Fraser is planning to launch its CVA next month and is expected to announce it wants to close around half the stores in its 59-strong estate, as well as seeking rent reductions.
But Ian Fletcher, director at the BPF, said its members, which include most of the country’s largest property companies, had “questioned whether [House of Fraser] is really insolvent”.
Landlords will increasingly vote against them – none of our members are in support of CVAs being used like this
Mark Williams, Revo
He said that landlords were becoming less likely to absorb the losses associated with CVA deals, especially in a market where it was becoming harder to relet space. Commenting on the current situation, Mark Williams, the president of Revo and from the shopping centre landlord the Hark Group, said: “CVAs have become an acceptable method for companies to get out of leases and that’s unfair.”
He added: “Landlords will increasingly vote against them – none of our members are in support of CVAs being used like this.”
Landlords who spoke privately to The Sunday Telegraph suggested that they were unhappy with the number of CVAs being proposed.
A major one said: “We are looking at [CVAs] on a case-by-case basis but we’ll certainly take a harder stance in future.”