House of Fraser is on the brink of collapsing, with the struggling retailer confirming Hamleys owner C.banner has pulled out of a rescue deal.
The high street chain had been able to keep some of its outlets afloat, including iconic Edinburgh department store Jenners, under plans by C.banner to invest in the business.
But C.Banner has released a statement this afternoon confirming the company no longer intends to go ahead with plans to buy a 51 per cent stake in House of Fraser.
C.banner was previously planning to inject £70 million of new capital into the retailer.
The decision leaves House of Fraser in a perilous position.
Three Scottish stores remain open – Jenners on Princes Street in Edinburgh and one each in Glasgow and at Loch Lomond – but face closure if the company goes into administration.
The firm has already announced the closure of its West End store in Edinburgh.
House of Fraser, which employs around 17,000 people, has said it is speaking to other potential investors about a rescue plan for the business.
The company had already announced in June the closure of 31 of its existing 59 stores, resulting in an estimated 6,000 job losses.
If a new investor cannot be found, the company would have to go into administration and almost certainly close the remainder of its stores.
Those potential closures would include Jenners, which has stood as a structural icon on Edinburgh’s Princes Street since 1838.
House of Fraser has previously described the restructuring proposal and investment from C.banner as the last viable option for the business, raising the prospect that it could now fall into administration.
Retail tycoon Mike Ashley, the founder and chief executive of Sports Direct, has reportedly offered House of Fraser a £50m loan in recent weeks.
However, it is understood Mr Ashley is not involved in the current talks with House of Fraser’s management.
Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.
Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio’s, Prezzo, Byron and Prezzo all pushing through CVAs this year.
House of Fraser’s collapse would mean major job losses for the retail sector, which has already been hit by a string of high-profile administrations from the likes of Toys R Us, Maplin, and Poundworld.
The full list of stores remaining open are:
Loch Lomond Shores (Jenners)
Reading (The Oracle)
West Thurrock Lakeside