An audacious bid to fill the House of Fraser branch in the City has been stopped in its tracks, after the landlord opted to sit on the property while market conditions remain uncertain.
The department store on King William Street is one of the 31 slated to close next year under the chain’s company voluntary arrangement (CVA).
But at least one prospective tenant has been turned away by landlord King William St Ltd, which is ultimately controlled by parent company Rajhi Invest. The Saudi group has investments in other City buildings such as the Trowers & Hamlins offices.
A new company called Fashion Collective had put forward a plan to turn the store into an upmarket showcase for emerging fashion designers which would sell new brands alongside more established labels. Plans included men’s and women’s hair salons and a champagne bar on the third floor.
Paul McKie, a director of the company, told City A.M. that he had hoped to save the jobs of several concession workers at the store. But after engaging with the property’s manager BNP Paribas Real Estate, the company was told last week that the landlord was not currently looking for a tenant.
“We’re just very disappointed,” said McKie. “We were led to believe it was the sort of proposal that the landlords were looking for and then it just stopped.”
City A.M. understands that King William St has put on hold any plans to seek a new tenant for the store as it waits to see how the turbulent retail property market develops.
Adding further uncertainty is the legal challenge brought by some landlords to the CVA earlier this month. On Friday it emerged that the £70m cash injection promised by new owner C.banner to prop up House of Fraser could also be in danger, after it was delayed due to the legal battle.
According to documents seen by City A.M., King William St was one of the creditors which voted against the CVA proposals, but it has not so far been named as one of the landlords taking House of Fraser to court.
Rajhi Invest and BNP Paribas were contacted for comment.