Ratings downgrade for both House of Fraser and New Look
Leading credit agency Moody's has downgraded its ratings on two of the British high street's biggest names.
New Look was downgraded to "junk" rating as Moody's warned that it could struggle to service its £1.1bn debt due to falling profits, according to The Sunday Times. The newspaper also reports that House of Fraser has been branded a “very high credit risk”, having been downgraded from B3 to Caal rating, following its report of week trading in the first three quarters of 2017.
Fast fashion chain New Look, which is majority owned by South African tycoon Christo Wiese's Brait investment fund, has had a turbulent year. Last month it posted a £10.4m underlying loss for the first half of the year on revenue down -4.5% at £686m.
It had parted company with CEO Anders Kristiansen in September and last month revealed that its former chairman Alistair McGeorge was returning to the business in the role of executive chairman in a bid to turn around its fortunes.
House of Fraser too has had a change of guard at the top this year. In May it appointed Alex Williamson as CEO, who joined the business from sporting venue Goodwood. He replaced Nigel Oddy who announced his departure last year. Williamson was selected for the role in part due to his focus on customer experience which is at the heart of the new House of Fraser strategy.
The business, which is owned by Chinese group Sanpower, reported in September that in the 26 weeks to 29 July 2017 the group achieved GTV (gross transaction value) of £545.8m with like-for-like sales were down 5.2%. Online sales were down 9.8% due to the disruption of the introduction of the new website, while an EBITDA loss of £8.6m (H1 2016/17: £0.9m) was also reported.