House of Fraser’s Chinese owner to offload stake

House of Fraser Mike Ashley

The Chinese firm that has a majority ownership of House of Fraser is reportedly planning to offload its stake.

According to a Chinese stock exchange filing reported by Bloomberg, Nanjing Xinjiekou Department Store Co is poised to sell off its 51 per cent holding to a tourism development company named Wuji Wenhua.

Nanjing Xinjiekou is a subsidiary of Sanpower Group, which bought House of Fraser in 2014.

The Retail Gazette has contacted House of Fraser but the retailer was immediately unavailable to comment.

The planned sale comes amid a turbulent time for the British department store chain, which recorded a slump in Christmas sales and had its credit rating downgraded by Moody’s.

An unnamed credit insurer which covered around 20 of House of Fraser’s 650 suppliers also opted to stop offering cover.

Further questions about its financial health arose after House of Fraser reportedly asked several of its landlords for rent reductions, and after it recently took the first steps to refinance its debt package with the appointment of Rothschild to act as an advisor.

House of Fraser’s main rival, Debenhams, is also going through a challenging period, although both brands are currently in the middle of respective turnaround plans that aim to restore footfall, sales growth and profits.

According to Bloomberg data, Sanpower Group owns a 27.32 per cent stake in Nanjing Xinjiekou.

When the former acquired House of Fraser in 2014, the deal valued the chain at £450 million.

Sanpower Group originally planned to open 50 House of Frasers in China, but so far has only opened one.

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