Struggling department store takes steps to refinance debt package

House of Fraser has appointed Rothschild as its financial adviser as it prepares to refinance its debt package.

The department store chain, owned by China’s Sanpower, has brought in the boutique investment bank to advise on the refinancing of £225m of its £390m debt package, maturing in July 2019, reports The Telegraph.

The move comes amid growing concerns about the health of the business.

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In December House of Fraser had its credit rating downgraded by investor agency Moody’s following three consecutive quarters of poor financial results.

Moody’s vice president and senior credit officer for House of Fraser David Beal said at the time that a recovery in the retailer’s profitbality is dependent upon either an improvement in the company’s product offering or in cost savings initiatives, which “each involve execution risks”.

Last month Sanpower chairman Yuan Yafei reasserted his support for House of Fraser, saying that he “remains confident” in House of Fraser’s prospects as it embarked on its turnaround plan.

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