Landlords are becoming increasingly frustrated with House of Fraser as the expiration of the one-year rent deals they agreed to with Sports Direct boss, Mike Ashley, approaches. When Ashley took over the struggling retailer and vowed to keep the majority of its stores open, he negotiated temporary rent reductions or waivers with landlords. While this move initially helped maintain occupancy and pay business rates, these deals are now coming to an end without a long-term solution in place.
The landlord of HoF’s Rackhams in Altrincham, a part of the Stamford Quarter shopping center, has already taken action by serving Ashley with a notice to vacate the premises. This is just the beginning of a series of similar contracts set to expire soon, leaving landlords uncertain about the future of the vacant HoF spaces. M&M Asset Management, the owner of the Stamford Quarter, is eager to redevelop the site into residential flats and cannot afford to wait indefinitely for a decision from Ashley regarding the store’s fate.
House of Fraser operates nearly 60 stores in the UK, meaning that other landlords may soon find themselves in a similar predicament to M&M Asset Management. Despite Ashley’s initial intention to keep the majority of stores open, he has since revised his plans and is now aiming to maintain only about two-thirds of the store estate. Given the short-term nature of many of the deals he secured, it is probable that numerous stores will be repurposed for non-retail uses due to the challenges of finding tenants for such large spaces.
The uncertain future of House of Fraser necessitates prompt decision-making. Landlords are losing patience with the lack of progress in reviving the chain’s fortunes and are exploring alternative uses for their spaces. This situation underscores the difficulties traditional department stores face amidst evolving consumer preferences and a shifting retail landscape. The destiny of House of Fraser and its stores is up in the air, but it is evident that time is ticking away for some as rental agreements draw to a close.
For more insights into the challenges facing traditional department stores in today’s retail environment, visit Forbes and Bloomberg.
