House of Fraser to get £15m injection to support transformation
The Chinese owner of House of Fraser is pumping more cash into the embattled department store chain as it reaffirms its commitment to the British company.
China’s Sanpower will inject about £15m into House of Fraser this week, reported the Guardian on Monday. The move comes during a turbulent time for the department store, which has been hit by devastating rumours over the last few months.
The company is trying to cut the size of its stores to slash its £140m-a-year rent bill after a tough Christmas period saw it report a 2.9% decline in sales.
Reports have also emerged about House of Fraser approaching a number of specialist lenders to refinance part of its £400m debt, and its Chinese owner Sanpower is understood to be in talks to sell its majority stake to another Chinese company.
But according to The Guardian, Sanpower, which bought House of Fraser in 2014, remains committed to the company and has promised further investment as well as a wider overhaul of the House of Fraser brand.
A spokesperson for Sanpower told the newspaper that Yuan Yafei, the company’s chairman, will inject the cash via Nanjing Cenbest, a subsidiary.
“We at Sanpower continue to support House of Fraser as it embarks on a year of significant transformation in 2018,” he said. “Sanpower, through the listed company, has invested £45m in House of Fraser and plans to inject further capital.”
House of Fraser is trying to transform itself into a more modern and flexible multichannel business, however its online sales plunged by 7.5% during the Christmas period. The tough trading conditions across the UK are also having an impact on the retailer, and plans to open 50 Chinese stores have been put on standby as the business struggles to cope with mounting debt.
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