House of Fraser is set to expand into Russia and the Middle East following its takeover by Chinese conglomerate Sanpower.
According to a report in the Financial Times, Sanpower chairman Yuan Yafei plans to open a flagship “Oriental Fraser” store in Nanjing next year, four franchise stores in Russia and two in Abu Dhabi over the next two to three years.
He also said the move would help Sanpower, which owns one of the oldest department stores in China, face the growing challenges posed by e-commerce and increasingly complex supply chains.
In the interview, Yafei said he believes China is currently oversaturated with malls that will go bankrupt over the next few years if they do not differentiate themselves and plans to use this to his advantage.
“We are buying House of Fraser right now because of our preparation for three years . . . when these complexes go out of business,” he told the FT. “Then it is our time, our turn to go in there and buy them, but we need to operate them in a totally new, different business model.”
Meanwhile, he plans to invest further in helping the company renovate its UK stores, but plans to leave the retailer’s UK management team in place.
House of Fraser has agreed to sell an 89% stake in the business to a Sanpower subsidiary for £480 million in the middle of April. Sports Direct founder Mike Ashley bought the remaining 11% stake from Sir Tom Hunter around the time of the sale.