House of Fraser to entice UK shoppers with Chinese brands

World
Europe

British department store House of Fraser will begin selling a range of premium Chinese brands to UK customers, with the chain’s Chinese owner pledging support for the Belt and Road Initiative.

House of Fraser is one of the UK’s most well-known department store chains, with 59 outlets across the country and a history dating back to 1849.

Chinese owner Sanpower is hoping that this brand prestige will be a boost to the “made in China” label, with House of Fraser struggling to stay relevant in an era of e-commerce.

Sanpower’s chairman Yuan Yafei is set to meet with Scottish First Minister Nicola Sturgeon in Shanghai on Thursday, with The Guardian reporting he will look to promote the Belt and Road Initiative.

Sanpower chairman Yuan Yafei /VCG Photo‍

In a separate statement, Sanpower said that the introduction of Chinese brands into House of Fraser department stores across the country would support the initiative.

The conglomerate has so far not provided any further details on which brands would be taking part, adding that they would range from electrical goods through to lingerie.

The extension of support to Chinese brands and the Belt and Road Initiative can be seen as a test of how much Western demand there really is for Chinese high-end products.

Simon Pickering, House of Fraser’s UK director of global product sourcing, told The Guardian “increasing numbers of high-quality Chinese products are becoming popular with British and European consumers. Once these products enter House of Fraser’s sales channel, they will be able to access Europe and the greater global market.”

Nanjing-based conglomerate Sanpower bought House of Fraser for 480 million pounds (680.8 million US dollars) in 2014, but the chain has struggled in terms of sales and costs since then.

Shoppers walk past House of Fraser on Oxford Street, London, April 2, 2018. /VCG Photo

In March, Yuan met with British Secretary of State for International Trade Liam Fox, reassuring him that he was committed to House of Fraser for the long-term amid fears that he would look to sell the company to Wuji Wenhua, a Chinese leisure firm.

Sanpower then pledged a 15-million-pound (21.3 million US dollar) cash injection into the historic British firm, after Christmas sales fell 2.9 percent in 2017. British retail is undergoing its worst period in five years, with House of Fraser looking to cut its shop floor space by as much as 30 percent in a bid to cut down on rental costs.

In December, Moody’s downgraded House of Fraser’s debt to junk status, citing challenges in the UK retail sector as well as internal problems related to financing and website upgrading.