A major retailer with a store in Huddersfield has confirmed it is seeking a reduction in some of its rents.
A spokeswoman for House of Fraser, which has a store at Kingsgate, said it has contacted some landlords asking for “their support.”
The chain, which is privately owned by Chinese conglomerate Sanpower, is expected to publish details of its Christmas trading performance this week – along with other rival retailers including Marks & Spencer and the John Lewis Partnership.
House of Fraser, which was bought by Sanpower for £480m in 2014, said in a statement: “We can confirm that we have contacted some of our landlords asking for their support as we drive forward with our transformation programme.”
It is understood that the retailer does not plan to close any stores, but is planning to downsize of stores by about a third over 10 years by getting rid of top floors or basements.
Richard Lim, chief executive of Retail Economics, said news of the firm’s financial troubles is another example of a retailer that has “failed to adapt” to changes sweeping through the industry.
He said traditional retailers had been put under intense pressure by the move to online shopping against a backdrop of inflexible leases, upward only rent reviews and spiralling operating costs.
“Put simply, many retailers are operating with business models that are no longer fit for purpose in today’s digitally-driven world,” he said.
Last September, the chain posted a half-year loss of £8.6m compared with profits of £900,000 for the same period in 2016 as the cost of launching a new web platform and “significant discounting” took their toll. Gross profits fell by 5% to £196.9m over the period.
The Kingsgate store underwent a major refurbishment in 2015 with new flooring, lighting and shop fittings and the introduction of several new premium brands across womenswear, menswear and fashion accessories.
On the lower ground, the menswear department doubled in size to take over the whole floor as homeware moved to the first floor. The ground floor unveiled an improved beauty hall, expanded fashion accessories and an upgraded womenswear and lingerie department.
Extensive work to the first floor now houses a new homeware department as well as a large Buy and Collect area with dedicated changing rooms for online shoppers.
