The retailer that was supposed to be the anchor store of Chester's £300 million Northgate redevelopment has pulled out.
House of Fraser today notified Cheshire West and Chester Council of their decision which is part of a whole Company Voluntary Arrangement.
That will include the closure of 31 of its 59 stores which could affect 6,000 jobs.
It is a major blow for the project which has come under fire in recent weeks.
An open letter signed by more than 120 local businesses was recently handed to the council, urging them to rethink parts of the project.
They are concerned about the amount of focus on retail and the plan to knock down the Crowne Plaza and replace it with a new hotel.
Councillor Samantha Dixon, Leader of the Council, said: “It is obviously disappointing that House of Fraser’s financial problems have led to one of our tenants to change their decision to be part of the Chester Northgate scheme.
“Whilst we remain committed to regenerating the Northgate area of the city and to delivering a high quality scheme, clearly we will reflect on the impact of this announcement. We will continue to keep the mix and phasing of the scheme under review and continue to engage with interested parties as we have done all along.
“The Council’s planning permission provides the flexibility for us to make changes in reaction to changes in the market in line with our prudent approach to development. The retail element of the scheme is scheduled to be delivered in the second phase of the development and so House of Fraser’s decision at this point does not fundamentally undermine our ambition to see the comprehensive redevelopment of this vital part of the city.”
The Chester Northgate project plans to transform the northwest quarter of Chester City Centre with a new leisure, residential and shopping development.
It is proposed that it will feature a new multi-screen cinema, market, shops and restaurants to complement the Storyhouse complex which will be officially opened by Her Majesty The Queen and Her Royal Highness The Duchess Of Sussex on Thursday 14 June.