House of Fraser opens first store in China after delays and departures

House of Fraser has finally opened its first outpost in China, almost two years after Chinese owner Sanpower trumpeted its plans to roll out 50 stores across the country.

Source: House of Fraser opens first store in China after delays and departures

House of Fraser has finally opened its first outpost in China, almost two years after Chinese owner Sanpower trumpeted its plans to roll out 50 stores across the country.

When Sanpower bought an 89pc stake in House of Fraser in a £480m deal in 2014, chairman Yuan Yafei laid out his intention to inject £150m of capital into its British store estate and open a string of international outposts.

The first Chinese House of Fraser store was originally planned to start trading in Nanjing at the start of this year but only opened its doors for the first time yesterday after being beset by delays.

Mr Yuan said: “We are very proud of the store: its unique design, premium offering, and prime location clearly emphasise our strategy for House of Fraser to become a leading global brand.”

Yuan Yafei (centre) with House of Fraser team, including Frank Slevin
Yuan Yafei (centre) with House of Fraser team, including Frank Slevin

Frank Slevin, a former HSBC banker and now chairman of House of Fraser, told The Telegraph that the company had learnt from the process and the teething problems involved in an international expansion plan with staff based in the UK.

The opening of the huge 425,000 square foot store in Nanjing, which includes two statues of beefeaters, was pushed back to September but the launch was then delayed to December to bring more fashion brands on board and fit out shops.

Mr Slevin admitted that plans for further stores including in Xuzhou, Jiangsu province, had been pushed back until the third quarter of next year as the local government was building a subway network directly under the store. He revealed the group was still in negotiations about sites for a third store in Chongqing, although this would be a refurbishment of an existing store, rather than a new development.

China store

The Nanjing opening follows a string of executive departures at House of Fraser, including chief executive Nigel Oddy, who took the reins in 2014 following the Sanpower deal. Mr Oddy said that the decision was a personal one.

“Following 10 great years at House of Fraser, and 23 years at Marks & Spencer [before that], I’ve reached a point in my life where I am ready for a new challenge,” he told The Telegraph. “I originally had only planned to stay at House of Fraser for five years.”

Sanpower’s ownership of House of Fraser has also come under fire following reports of a lack of investment in the group’s 59 UK stores, partly as a result of the British business paying for developments in China. Mr Slevin had said that House of Fraser’s management had not needed the £150m originally promised by Sanpower after the department store chain refinanced its debt, saved £25m on an Infosys program, and overperformed on sales targets by £40m.

He said accusations of restrained investment in the UK were unjustified as Sanpower had invested £90m in the last year on capital expenditure and planned to spend £20m in the new year on UK store refurbishments, such as sprucing up beauty halls, with a further £35m to go on IT.

Mr Slevin said that House of Fraser was planning to introduce more Hamleys concessions into stores as pop-ups. Hamleys is owned by the brother-in-law of Mr Yuan.

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