LONDON — The Chinese conglomerate Sanpower is looking to sell a majority stake in British retailer House of Fraser to Wuji Wenhua, a tourism development company, a House of Fraser spokeswoman confirmed Tuesday.
Sanpower owner Yuan Yafei, who also owns China’s oldest department store Nanjing Xinjiekou, is looking to offload its 51 percent stake in House of Fraser that he purchased in 2014 in a deal that was valued at 480 million pounds.
“We welcome the potential new collaboration between Nanjing Cenbest [the Shanghai-listed department store chain and a subsidiary of Sanpower] and Wuji Wenhua,” a company spokeswoman said.
“Although Nanjing Cenbest and Wuji Wenhua are still in discussions, we believe that Wuji Wenhua can be a strong strategic equity partner as they possess vast experience in the leisure sector and have access to a large network of travelers. This will have no impact on the day-to-day operations or strategic development of the House of Fraser business in the U.K. and Ireland. It is business as usual.”
The company said the partnership will help House of Fraser reach an increasingly large international consumer base.
The sale comes at a time when British fashion and non-fashion retailers have had been impacted by issues such as higher sourcing charges due to the decline of the pound since the Brexit vote, low consumer confidence, declining footfall and expensive leases. British stores such as Toys ‘R’ Us and the electronics store Maplin have recently shuttered as a result of those pressures.
As reported, last year, House of Fraser laid out its five-year vision plan, which includes a 45 million pound investment on improvements with a focus on its IT infrastructure. The retailer planned to launch House of Fraser Journal with 900,000 copies to be distributed and sent to its customer database.
In addition, it plans to have a mobile-first mind-set, adjusting the platform for digital devices. Other initiatives include more customer service contact in-store, hosting more events and incorporating experiential treatments, such as restaurants, within the shopping experience. House of Fraser has also scaled back and cut a few of its house brands. House of Fraser stocks in-store labels in fashion and home, including Linea, Biba, Episode and Dickins & Jones.
Sanpower’s acquisition of House of Fraser has proven to be controversial for its failure to live up to the vision the Chinese firm originally outlined for the department store chain. When Sanpower bought the retailer, it outlined plans to take it globally with outposts in Russia, the Middle East and especially China. Sanpower had discussed plans to open up to 50 House of Fraser stores in China under the name “Oriental Fraser.” In the end, only one House of Fraser store opened in China, in Nanjing in 2016. None of the other plans ever came to fruition, and Sanpower perennially failed to invest in the chain.