Anger justified as House of Fraser axes stores, jobs and demands rent cuts

It sometimes seems like retailers are pushing the panic button with a higher frequency than that at which Game of Thrones characters meet their makers.

The latest to warn that it faces a future as a white walker unless its landlords help it out of a hole is House of Fraser, the department store chain.

It has put forward a company voluntary arrangement, an insolvency procedure, that will leave it with less than half of its 59 stores if it manages to force the plan through.

Some 31 will close leaving 6,000 people out of work. A number of the landlords slated to play host to the HoF outlets that remain are, meanwhile, going to have to accept a lot less rent.

New Look, Prezzo, Carpetright and Mothercare have all played a similar game in recent months, although the latter botched its move by failing to secure the 75 per cent support required from a subset of its landlords.

So common have CVAs become that the British Property Federation, a trade body for the latter, has cried foul, suggesting that they might be being misused by companies that are restructuring rather than insolvent. It has also highlighted how it tends to be its smaller members at secondary sites that get hit hardest.

While landlords don’t tend to elicit much sympathy, it's not unfair to ask why they should suffer as a result of the bad decisions made by the bosses of these chains; the people who failed to invest in adapting their businesses to the changes taking place under their noses. Sure it's tough out there, but not every retailer is at death's door.

The BPF isn’t alone in crying foul about this. One of those retailers, Next, is reportedly demanding CVA clauses in its rental agreements so it can benefit from the sort of deals secured by bombed out rivals that resort to them.

You can see its point. Next hasn’t been free of problems, but has proved you can make a success of retailing if you’re good at retail. It will be a lot harder to pull off that trick if it has to compete with, say, House of Fraser stores that also sell clothes but benefit from much cheaper rents than it has to pay.

Ultimately the stark truth is that landlords with a dagger held to their neck have little option but to surrender because something is better than nothing. Is there any one of the rogue’s gallery I’ve listed that you would have described as a vibrant business prior to calling for a CVA? Did any of them look like, well, Next?

It’s hard lines for some of the smaller landlords in particular, but the real victims in this story are the people who will soon face a trip to the local Job Centre Plus, or whatever they call it these days. As for the real scandal, how about the vast sums of money all those companies spent on the executives who failed them?