British department store group House of Fraser will reportedly sell the majority of its shares to a Chinese brand C. Banner. With the retailer’s Company Voluntary Arrangement (CVA) around the corner, 59 of its store are expected to be shut.
However, the analysts believes that with the inclusion of capital, House of Fraser can stage a comeback.
Successful apparel retailer in China, C. Banner has committed to invest over 10 million pounds (for 51 per cent shares) in the English company which will make the Chinese retail brand the new owner of about 17,000 staff.
A retail analyst at GlobalData, Charlotte Pearce said that there have been many CVA’s delaying what will inevitably happen and the recent CVA at least provides hope to those remaining stores that have been waiting for years to get investment.
In the first half of 2017-18, House of Fraser’s online sale saw a decline of 9.8 per cent even after the investment of 25 million British pound, the apparel retailer has failed to utilise its full potential and withstand the retail storm, notably. “To turn these numbers around in coming time will be a tough task,” added the analyst.
The CVA’s terms are yet to be finalised but by shutting down the weaker stores, there is still a possibility of House of Fraser for their revival.
Reducing the number of stores in its Tier II and III locations, which were suffering from complete footfall is also expected to benefit the England-based company.
A data shows that just 16.2 per cent of England’s consumers’ shops at House of Fraser, which is considerably lower than brands like Debenhams and John Lewis that have 41.3 per cent and 32 per cent consumer-ship, respectively, in the United Kingdom.
Only 60.1 per cent of the consumers gave ratings from 7 to 10 to the British store, which is way lower than that of Debenhams (72.2 per cent) and John Lewis (81.9 per cent), in a recent survey.
To stay in the competitive market, House of Fraser needs to invest in their own brand range to attract customers from their counterparts in the retail sector.
