The move toward online shopping and a Brexit-related rise in prices are causing more pain for British retailers, with department store House of Fraser saying it plans to close over half its stores, including its flagship premises on London's Oxford Street.
The chain, founded in 1849, filed plans in court Wednesday to close 31 stores, which would put over 6,000 jobs at risk. Frank Slevin, Chairman of House of Fraser, said Thursday that the closures are "absolutely necessary if we are to continue to trade and be competitive."
The store closures follow the acquisition of the company by Chinese fashion conglomerate C.Banner, which recently bought 51 percent of the company. A condition of the deal was that House of Fraser agreed to sort out its debt problems.
As part of the proposal, which requires approval by creditors by June 22, House of Fraser would also move its London Headquarters to Glasgow.
The significant restructuring of the business follows what House of Fraser called "a difficult trading environment" for British retail.
"The announcement to close such a significant number of stores highlights the unyielding shift towards online shopping and the overcapacity concerns faced by a significant proportion of the market," said Richard Lim, the head of market analysis group Retail Economics.
Rising inflation caused by Brexit has weakened consumer spending, and near stagnant economic growth in the first quarter of this year has challenged retailers.
House of Fraser's store closures follow a wave of shocks to the British retail industry. Giants like Toys R Us and Maplin shut this year, DIY store Homebase sold for a mere 1 pound this month, and in April supermarket chain Marks and Spencer revealed plans to close 100 shops by 2022.