Early reaction to the news that Nanjing Cenbest, owners of Nanjing Xinjiekou Department store, will take international brands to China through House of Fraser has been positive, with many saying the deal will “open the door to the east”.
Nanjing Cenbest officially completed a deal to acquire around 89% of HoF parent company Highland Group Holdings for £480m on September 2.
The full plans are yet to be revealed, but Yuan Yafei, chairman of sanpower, Nanjing Cenbest’s largest shareholder, said in May that the long-term plan was to export the HoF model throughout Asia.
The first international store is likely to be in Nanjing, southern China, where Sanpower said it had plans to open an ‘Oriental Fraser’ store.
This week Yafei said HoF would serve as a “bridge” for premium brands between China and Europe. Brands have said the deal is a “fantastic opportunity” for British businesses to break into China.
Andrew Tompsett, head of UK for menswear brand Merc, which is stocked in HoF, said: “We have had discussions with House of Fraser as Merc was one of the brands they had earmarked to bring into the proposed Nanjing store.
“We don’t have all the details yet, but we’re very positive about the deal, it’s a wonderful opportunity for us. China is a very difficult market to navigate, so it will be a window for the brand and could open the doors for licensing across the country.”
Gareth Jones, head of sales at men’s young fashion brand Duck and Cover, another brand stocked by HoF, said it had yet to be approached but would be interested in a move to China. He said: “We don’t have a presence in China and it would be great to break into that market with someone we already work closely with.”
Daniel Rubin, executive chairman of footwear retailer Dune, added: “It’s a fantastic opportunity to get into the Chinese market with our major department store partner.”
HoF chief executive John King said it would be in contact with brand partners shortly to outline its plans for becoming a “truly global multichannel retailer”. Nanjing Cenbest will also be investing a further £50m into the UK side of the business with a focus on refurbishing stores and improving the retailer’s IT infrastructure.
The remaining 11% stake in HoF is held by West Coast Capital, a subsidiary of the Sports Direct Group. Nanjing Cenbest offered to acquire this shareholding on the same terms as the acquisition, but no agreement was reached.
According to a report by the Telegraph, Sports Direct owner mike Ashley is working on a plan to sell some of its merchandise in HoF stores.
House of Fraser would not comment.