The Chinese owner of Hamleys, C. Banner International is in talks to buy a 51 per cent stake in House of Fraser.
The company has said it had signed a memorandum of understanding with Nanjing Cenbest, House of Fraser’s current Chinese owner, to purchase a ‘possibly very substantial’ equity interest in the chain.
C. Banner – best known in China for selling footwear – took its first steps in Britain three years ago with a £100 million swoop on Hamleys, the 256-year-old toy shop. It is run by Chen Yixi, brother in law of Yuan Yafei, the Chinese billionaire whose Sanpower group is in control of House of Fraser.
C. Banner said that acquiring the House of Fraser stake “would mark an important step towards the implementation of the company’s global branding strategy, which lverages the brand recognition effect of world-renowned brands.”
Any deal would be subject to due diligence on House of Fraser’s assets, liabilities, operations and financial and legal affairs.
Following a period of tough trading, the department store last week appointed KPMG to advise it on a turnaround strategy and in January wrote to landlords asking for rent reductions. Reports also indicate that it was seeking external financing as it battles difficult trading conditions.