House of Fraser’s Chinese owner is reported to be planning to sell off its majority stake in the British department store.
According to Bloomberg, Nanjing Xinjiekou Department Store Co (part of the Sanpower Group) has filed its intention with the Chinese Stock Exchange to sell its 51% holding to a tourism development company named Wuji Wenhua.
Sanpower Group, which owns a 27.32% stake in Nanjing Xinjiekou, acquired House of Fraser in 2014 in a deal that valued the business at £450m. At that time it said it planned to open up to 50 stores in China but to date has opened just one in Nanjing.
The news comes after House of Fraser revealed it had experienced a tough period of trading over Christmas. In its last trading update it revealed store sales down -2.9% in the six weeks to 23 December and, unlike a number of other retailers, it was not boosted by a strong e-commerce result, as digital sales were also down -7.5%.
House of Fraser is not alone in having felt the brunt of a fall in consumer confidence and the migration of shoppers online. Fellow department store Debenhams has also been struggling. It experienced a 1.3% drop in like-for-like sales over Christmas (in the 17 weeks to 30 December).
Last week it was revealed that Mike Ashley’s Sports Direct had upped its stake in Debenhams to just beneath the mandatory takeover offer threshold of 30% and said it is seeking a “strategic partnership” with the department store, which is currently in the midst of a turnaround plan led by CEO Sergio Bucher, formerly of Amazon.
House of Fraser has recently made a number of changes to its top team. In February it was announced that former Fenwick managing director David Walker-Smith was joining the business as chief product and trading director, replacing Maria Hollins who left in January.
Last September it appointed a new CMO, Paddy Earnshaw, who joined the firm from Doddle and indirectly replaced former chief customer office David Walmsley. And prior to that new CEO Alex Williamson arrived at the business in July, from sporting venue Goodwood, replacing Nigel Oddy.
House of Fraser has not commented on this latest development.