House of Fraser’s Chinese owner Nanjing Xinjiekou Department Store Co has signed a memorandum of understanding with the owner of toy retailer Hamleys, C Banner International Holdings, on the potential sale of a 51% stake in the department store chain.
A memorandum of understanding is a non-binding agreement between two or more parties, and is often viewed as the first stage in the process of drawing up a formal contract.
In the meantime, Nanjing Xinjiekou – which owns 89% of HoF – continues to discuss the sale of the same 51% stake to tourism development firm Wuji Wenhua, Shanghai stock exchange filings show.
In a note to suppliers, seen by Drapers, House of Fraser CEO Alex Williamson said: “Owing to the strict exchange rules around the proposed transaction, I can’t comment on the potential deal, but will of course keep you informed of the progress as soon as I can.
“Safe to say our focus is on business as usual.”
As well as running Hamleys, C Banner is one of the leading retailers of mid-to-premium women’s formal and casual footwear in China. The group manages self-developed brands, namely C Banner, Eblan, Sundance, Mio, Badgley Mischka and Natursun, and it distributes United Nude brand products. The group also sells Steve Madden shoes in China through a joint venture.
Chinese conglomerate C Banner is a strategic partner of Sanpower Group, which operates Nanjing Xinjiekou as a subsidiary. C Banner is run by Sanpower chairman Yuan Yafei’s brother-in-law, Chen Yixi. HoF chairman Frank Slevin is chairman of the board at Hamleys of London.
In 2016, C Banner issued a statement to the Hong Kong Stock Exchange outlining an alliance with Sanpower Group that “may eventually lead to an acquisition” of a stake in HoF.
Nanjing Xinjiekou plans to retain a 38% stake. The remaining 11% is owned by Mike Ashley.