In a move that is indicative of the U.K. shopping market, the Chinese owner of British department store chain House of Fraser will sell its majority stake in the company less than four years after its acquisition.
Nanjing Xinjiekou Department Store Co. plans to offer its 51 percent holding to another China-based firm, the tourism development group Wuji Wenhua, according to a Chinese stock exchange filing obtained by the Financial Times. The sale comes at a time when U.K. consumers are increasingly turning to e-commerce instead of traditional brick-and-mortar shopping.
House of Fraser saw a 2.9 percent drop in sales in the weeks leading up to the Christmas holiday, compared with the same period in 2016.
As its largest shareholder, Sanpower Group Co. Ltd. owns a 27.32 percent stake in Nanjing Xinjiekou, having bought House of Fraser in 2014. However, the Chinese private conglomerate faced challenges in launching 50 new stores in China under the name Oriental Fraser. Only one House of Fraser store eventually made it to the country, opening in the city of Nanjing in late 2016.
Watch on FN
Data from London’s Office for National Statistics last fall revealed that retail sales in the United Kingdom were in decline, with stores that sell non-food items like clothes and technology suffering the greatest decrease in sales, while the online sector saw a significant surge, accounting for 17 percent of all retail sales in the country.
Smartphone Users Are Spending Less Time but More Money Online Shopping
5 Chinese Companies Making Major Investments in European Luxury Fashion Brands