In a statement, the high street chain said the proposals are ‘central to the significant restructuring of the business, without which House of Fraser does not believe it has a viable future.’

They involve shutting 31 of its 59 outlets, including the flagship Oxford street store, by early next year. House of Fraser will be left with 28 stores, and also proposes to relocate its Baker Street head office and Granite House office in Glasgow to new locations to help to reduce costs.

The terms of the CVA are a condition of a proposed agreement for Chinese fashion company C.banner International Holdings Ltd to  acquire a 51% stake in House of Fraser Group Ltd and introduce ‘significant’ new capital to the company, which has been hard hit by the move to online sales.

Frank Slevin, chairman of House of Fraser said: ‘The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive. Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.’

The company said the CVA would ‘affect up to 2,000 House of Fraser colleagues and a further 4,000 brand and concession partners. Those impacted by the proposed changes have already been informed.’

The consultation on the CVA proposals will take place over the next 17 days and House of Fraser will seek approval from its creditors on 22 June 2018.

Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVAs, said: ‘The business has been impacted by the mounting pressures facing the UK high street, with the declining profitability of certain stores exacerbated by costly legacy leases which were originally negotiated many years ago. With trading conditions unlikely to materially improve in the short term, the future of House of Fraser is at significant risk unless steps to restructure the business both financially and operationally are taken.’

House of Fraser currently operates 59 leased stores across the UK and Ireland, although two stores are excluded from the CVA proposals, one store in Ireland and another held by a separate legal entity.

CVAs are being proposed by two entities, House of Fraser (Stores) Ltd and House of Fraser Ltd, which will divide the 57 store portfolio included in this proposal into three categories.

Rob Croxen, restructuring partner at KPMG and second proposed supervisor of the CVAs, said: ‘For a total of 16 “Category 1” stores, the leases will be retained at current rents. For a further 10 “Category 22 stores, a reduced rent, equivalent to 75% of the current rent, will be sought. Across both these categories, the stores will remain open and continue to trade upon successful implementation of the CVA.

‘For the remaining 31 stores, a reduced rent, equivalent to 30% of the current rent will be paid for seven months, after which these stores will close. It is important to stress that none of these stores will close on day one, and employees, business rates and suppliers will continue to be paid on time and in full for the duration of the closure period.’

Report by Pat Sweet