House of Fraser will open its first Chinese department stores in tier-two cities Nanjing, Xuzhou and Chongqing from spring 2016.
Nigel Oddy, who took over from John King as chief executive of HoF in February, told Drapers the stores will be approximately 250,000 sq ft each and positioned as “premium” or “aspirational affordability”, with prices equivalent to those in the UK.
The first of the three will open in Nanjing this time next year. The UK business will move into a store owned by its Chinese parent company Nanjing Cenbest, of which Sanpower Group is the largest shareholder. Nanjing Cenbest is currently trading as Nanjing Orient Department Store, but will be rebranded as House of Fraser. The store is located in the city’s business district, Xinjiekou.
Oddy said it will take the “best parts of House of Fraser” and adapt them to the local market. “We want to play on our heritage, our Britishness, and make sure the brands that we put in are fit for purpose, so fit for that market.
“There could well be some local brands to complement the Western ones, but the focus is very much on being a quintessential British department store in the way it looks and the brands it stocks.”
The second store in Chongqing is expected to follow later in the year. Oddy said: “Chongqing has the biggest city population in the world, with 33 million people, and a number of Western brands are already there, such as H&M and Tommy Hilfiger.”
The Xuzhou store will open in 2017 and will anchor a new development called Sanpower Plaza, which comprises residential, office and retail space.
HoF will hold a brand engagement day in the UK in April, where it will present the look and feel of the new stores.
It has commissioned a research report into demographics and sizing in China to help shape its positioning and expects to receive an interim report next month.
Oddy said the business decided to focus on tier-two cities in the first instance because tier-one locations, such as Beijing and Shanghai, are “over-shopped”.
He added: “We want to get established in these three cities and then look to roll out further. Shanghai could well be one of those stores, but there are no firm plans.”
Distribution will be done through the UK, but this will be reviewed as the stores grow.