Tuesday 16 October 2018

House of Fraser to be sold off by Chinese owners

Sanpower-owned group Nanjing Xinjiekou Department Store is selling a majority 51% stake in House of Fraser to Chinese tourism group Wuji Wenhua.

House of Fraser is being sold by its Chinese owners (Dominic Lipinski/PA)
House of Fraser is being sold by its Chinese owners (Dominic Lipinski/PA)

By Holly Williams, Press Association Deputy City Editor

House of Fraser is being sold by its Chinese owners in the latest sign of upheaval on Britain’s beleaguered high street.

Sanpower-owned group Nanjing Xinjiekou Department Store is selling a majority 51% stake in House of Fraser to Chinese tourism group Wuji Wenhua.

It comes after recent trading troubles at House of Fraser and amid a dismal start to 2018 for UK retail, with Toys R Us and Maplin both collapsing into administration in February.

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Toys R Us was one of a number of retail casualties in a tough start to the year for the sector (Aaron Chown/PA)

A House of Fraser spokesman said it was “business as usual” at the chain in the UK, adding that the move was “just a change of ownership”.

Sanpower bought House of Fraser in 2014, but the deal has since proved ill-fated for the Chinese giant, with UK trading under pressure and little success in its plans to launch department stores worldwide.

House of Fraser reported a 2.9% fall in sales in the crucial six weeks to December 23, while online sales fell 7.5% after hiccups with the launch of a new web platform.

The chain was forced to ask for rent cuts on some of its stores in early January, while also overhauling its supplier base as part of moves to cut costs.

At the time of the Christmas trading update, Sanpower chairman Yuan Yafei said the Chinese group was “fully committed to its long-term investment in the UK retail market”.

He added Sanpower would continue to provide “all the necessary support to ensure House of Fraser’s success as the leading UK premium department store chain”.

The group had planned to expand the chain internationally, with 50 House of Frasers planned across China under the name Oriental Fraser.

But it has only opened one House of Fraser in China – a store in Nanjing in late 2016.

Other minority shareholders in House of Fraser include Sports Direct founder Mike Ashley.

Nanjing would retain a 38% shareholding in House of Fraser if the deal goes ahead.

It said it was still in talks with Wuji Wenhua, but added the firm would be a “strong strategic equity partner as they possess vast experience in the leisure sector and have access to a large network of travellers”

“This additional partnership will help House of Fraser to further internationalise its brand to reach out to an increasingly large international consumer base,” it added.

Press Association

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