Sanpower Group, the Chinese conglomerate with a portfolio that spans IT, finance, media, real estate and retail, is in advanced talks with House of Fraser, although the British department store retailer continues to lay the groundwork for an initial public offering.

This story first appeared in the March 31, 2014 issue of WWD. Subscribe Today.

Sanpower is said to have tabled a bid that values HoF at 450 million pounds, or $750 million at current exchange. The retailer has 61 stores in the U.K. and Ireland and annual sales of 1.2 billion pounds, or $2 billion.

A House of Fraser spokeswoman declined to comment on the news.

However, an industry source said that conversations between the two parties are “advanced, although nothing has been signed,” and added that a deal could happen very soon. The source stressed that an IPO could still be in the cards.

Sanpower is based in Nanjing, China, and run by its fouder, Yuan Yafei. It has two publicly listed subsidiaries, including Nanjing Xinjiekou Department Store Co. Ltd., which sells general merchandise including clothing. Its other holdings include China Newsweek and China Business Times. According to its Web site, the group owns or controls more than 100 companies and has a workforce of nearly 30,000.

Although House of Fraser has never actually confirmed its future plans, it is no secret in Britain that the retailer has been pursuing a dual-track strategy of readying for an IPO, and holding talks with potential buyers at the same time. Earlier this year, advanced talks with Galeries Lafayette broke down, and industry sources said an IPO was on track for this summer, with Rothschild handling the process.

Last December, sources told WWD that House of Fraser was looking for an enterprise value of up to 450 million pounds, and that both options — IPO or sale — were attractive. Sources earlier this year said a bid from a Chinese company was possible, although noticing it had been tabled at that point. The Chinese see the potential to expand House of Fraser into China and also to have HoF advise Sanpower on how to upgrade its Chinese department stores.

News of the current talks was first reported on Sunday by The Sunday Times of London.

As reported, House of Fraser has been seeking to rationalize its fragmented shareholder base and seek new, strategic investors that will add value to the business and help it evolve as a multichannel retailer. The chain is looking to leverage its retail network and name abroad.

House of Fraser has also built up a successful e-commerce business, and a concept store, a mobile Web site and mobile app, while click-and-collect has become a rapidly expanding distribution channel.

House of Fraser, which stocks fashion brands including Michael Kors, Tommy Hilfiger, Kenneth Cole, Alice by Temperley and Phase Eight, as well as Hermès, Gucci and other luxury labels in some of its flagships, has a broad shareholder base. Its chairman is Don McCarthy and his family holds nearly 20 percent of the company’s shares.

The management team is led by chief executive officer John King, who has turned the chain around and pushed hard into the digital space.

Around 49 percent of shares are still held by representatives of the failed Icelandic banks linked to HoF’s former owner Baugur, which went bust during the financial crisis. Other shareholders include British retailers Sir Tom Hunter and Kevin Stanford and Lloyds Bank.

If a deal were to go through, HoF would be the latest in a string of British fashion brands to be purchased by the Chinese. Two years ago, the Hong Kong-based YGM Trading, owner of Guy Laroche, purchased Aquascutum.

That same year Trinity Ltd., part of the Li & Fung Group, bought the Savile Row tailor Gieves & Hawkes in a deal valuing that company at $95.3 million. Trinity Ltd. also owns the British brand Kent & Curwen.

Last September, Fung Capital, the Hong Kong-based Fung family’s private investment vehicle that owns Hardy Amies and other luxury brands, purchased the Savile Row tailor Kilgour for an undisclosed sum.