House of Fraser sells three stores
HOUSE Of Fraser said it had exchanged contracts to dispose of three of its stores to two purchasers for a total of £10.7m cash, with a further £1m held on retention. This would give rise to a net loss on disposal of £5.5m, it added.
The company said additional related exceptional closure costs of £1.5m, in respect of redundancy costs, stock clearance activity and other contractual liabilities were expected to be incurred during the current financial year.
The disposals of Aberdeen, Dundee and Perth are in line with the group's strategy of divesting those stores where the cash proceeds of disposal exceeds the discounted future earnings stream, it said.
The stores in Aberdeen and Dundee are being acquired by Glasgow-based Dawn Developments who intend to convert them for multi unit retail use.
Completion is scheduled for mid-January, 2003. Until then both stores will remain in House of Fraser possession and will continue to trade through Christmas and the primary January Sales period.
The Perth store was being disposed of to Debenhams and it was Debehhams' intention to continue to operate the store, with completion expected in September 2002, it said.
The group intends to reinvest the disposal proceeds in its refurbishment and new stores opening programmes, while its new and recently refurbished stores have continued to perform in line with its investment requirements.
New stores are scheduled to open in the City of London in 2003, Croydon and Dublin in 2004, and in Norwich, Maidstone and High Wycombe in 2005, with a number of other new stores in the pipeline.
