House of Fraser, recently bought out by the Chinese conglomerate Sanpower Group, has announced plans to open stores in the Jiangsu Province of China.
This is a clear indication of the Sanpower Group recognising that China is key market for them and that Jiangsu is a key area as a leading provincial economy and its position internationally. The initial department stores will open in 2016 in the Chinese ‘second tier’ cities of Nanjing, Xuzhou and Chongqing.
Chief Executive of House of Fraser, Nigel Oddy, said the business decided to focus on tier two cities in the first instance because tier one locations such as Beijing and Shanghai are “over-shopped”. The second tier cities have a population between them of 46.4m; almost the total population of England.
“We want to play on our heritage, our Britishness, and make sure the brands that we put in are fit for purpose, so fit for that market.”
Nigel Oddy, Chief Executive, House of Fraser
Focus on Jiangsu Province
The first store will open in Nanjing, currently occupied by parent company Sanpower. Nanjing is the provincial capital of Jiangsu Province, with Shanghai, the largest economic centre of China, just to the southeast. Jiangsu Province has a huge population of 79.4 million and is the most densely populated province in China.
China is now the second largest source of global outward investment and is a hugely important market for UK exports and tourism. Essex International at Essex County Council helps companies and organisations to access the Chinese market by providing unique access to the market through an exclusive 26-year relationship.
Sanpower buys House of Fraser
In 2014, the Sanpower Group, which operates the highly profitable Nanjing Xinjiekou Chinese department store chain (南京新街口百货商店股份有限公司), signed a deal worth £480m to acquire 89% of House of Fraser, which represents the largest overseas acquisition in the retail sector by a Chinese business.
It is thought Sanpower Group is planning the opening of up to 50 Chinese House of Fraser stores that could open under the name Oriental Fraser.
“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.
We have always been looking to invest in strong brands like House of Fraser, and take them to the next level of growth. With House of Fraser, we see significant opportunities to develop the business further and replicate the already successful model in international markets, in particular in China.”
Yuan Yafei, Sanpower Group Chairman