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House of Fraser strikes deal to sell 89% stake to Sanpower for £480m

RBR Staff Writer Published 14 April 2014

British department store chain House of Fraser, which is battling to restore profitability, has signed deal to divest 89% stake to the Nanjing-based conglomerate Sanpower in a £480m deal.

House of Fraser

Established in Glasgow, Scotland in 1849, House of Fraser offers clothing, cosmetics and houseware products. It presently has 61 stores in Britain and Ireland and had annual sales of about£1.2bn.

Sanpower Group chairman Yuan Yafei said this acquisition is a landmark transaction for a Chinese listed company.

"House of Fraser is a strong and iconic heritage brand in the UK and abroad, with exceptional fashion credentials," Yafei added.

House of Fraser has been looking for potential buyers for quite some time while also considering a possible initial public share offer.

Sanpower is run by tycoon Yuan Yafei, who has interests in finance, property, media, transport and IT, with assets worth nearly £5bn.

The company is planning to inject £70m to £80m into House of Fraser in order to finance a wide-ranging store revamp and website improvements.

The business is also planning to open new stores or change some existing sites to the House of Fraser name.

Following the deal, House of Fraser could open up to 50 stores across China, with the company reportedly intending to use the name 'Oriental Fraser' for the new shops. Initially, House of Fraser could open 20 stores.

Image: House of Fraser in Belfast.Photo: Courtesy of Ardfern.