- Vivian Hendriksz |
London - Things are not looking good for House of Fraser. Weeks after reports emerged that the deparment store hired investment bank Rothschild to look are refinancing its debt packages comes news that Nanjing Xinjiekou Department Store co ltd., HoF's Chinese owner, is looking to sell its majority stake in the struggling department store chain.
Nanjing Xinjiekou to offload stake in House of Fraser
The Chinese company is set to sell its 51 percent stake in HoF to Wuji Wenhua, a tourism development company according to a Chinese stock exchange filing on Tuesday, reports Bloomberg. The planned sale of House of Fraser comes as other UK retailers continue to face increasingly difficult trading conditions, with both Toys 'R" Us UK and electronics retailer Maplin falling into administration in February.
The upcoming sale comes after House of Fraser reported a 2.9 percent decline in sales during the peak holiday trading season. The struggling retailer has already entered negotiations with landlords in a bid to reduce rents on a number of its 59 UK stores and signed a deal to sell the intellectual property rights of its now defunct company-owned brands for 30 million pounds, in a effort to cut costs.
Sanpower Group, which holds a 27.32 percent stake in Nanjing Xinjiekou, acquired House of Fraser back in 2014 through its subsidiary, in a deal which valued the department store chain at 450 milllion pounds. Shortly after the acquistion, the Chinese congolmerate stated it aimed to open 50 House of Fraser stores in China under the name "Oriental Fraser." However, as Sanpower's own Chinese department store began to face increasing pressure from the rise of online shopping, the company rolled back on its decision, opting to open a single House of Fraser store in China at the end of 2016.
House of Fraser was immediately unavailable to comment.Photo: Courtesy of House of Fraser