• Home
  • News
  • Fashion
  • House of Fraser To Leaseback Stores To Improve Funds

House of Fraser To Leaseback Stores To Improve Funds

By FashionUnited

loading...

Scroll down to read more

House of Fraser, in a bid to improve its finances and reduce debt, has agreed sale and leaseback deals for its Cirencester and Shrewsbury stores. The department store group will enter into new 35 year leases on both stores and continue to trade as usual.

After taxes and costs, as well as the 3.1m book value of the stores, the deal will see HoF's with a profit of £10.1m. which will be used to reduce its longstanding debt. The group has now completed a similar deal on its Manchester store, making an exceptional gain of £12.3m. HoF has given further insight of its financial services partnership with Barclaycard, which will see the credit provider take over the store's customer credit accounts.

The cash payments made by Barclays Bank to the group between January 2005 and January 2007 are expected to total around £25m, with an additional performance related payment of around £10m is due in January 2008. The total cash generated from the property transactions and the financial services partnership with Barclaycard will be over £60m by January 2008, with over £30 million received by the end of January 2005, used to reduce debt.