When the British department store House of Fraser was first established under the name of “Fraser & Sons” in the 1840s, in Glasgow, Britain had just emerged from the First Opium War and acquired Hong Kong as a colony courtesy of the Treaty of Nanjing.
The Nanjing connection has been a happier one for China in recent years. In 2005, Nanjing Automobile bought MG Rover. And last week, Nanjing’s 62-year-old Xinjiekou Department Store agreed to buy 89 percent of House of Fraser, its senior by 103 years, in a cash deal.
France’s Galeries Lafayette had been interested in taking over House of Fraser, until talks broke down in January. British retailing figure Mike Ashley bought the other 11 percent before Xinjiekou and House of Fraser reached an agreement.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
In addition to the buyer’s deep pockets, access to an enormous potential market was appealing for the British store. “The agreement paves the way for House of Fraser to forge into China, where consumers are hungry for its offering of affordable luxury alongside the world’s most upmarket fashion brands.” Financial Times noted on the acquisition.
Similarly, Nanjing Xinjiekou Department Store, owned by Sanpower Group, seeks to use this acquisition as an opportunity to transform its retailing model from a traditional department store into a more modern one.
“Once we bought it, Xinjiekou can learn from it,” said Sanpower’s CEO, Yafei Yuan. “Meanwhile, it’s very beneficial for Fraser itself, as well. British market has its limits and grows rather slow.” The 49-year-old Nanjing-based businessman says that his company has already decided on Fraser’s Chinese name and plans to open more Fraser stores all over China.
“Yuan is one of those entrepreneurs who has been around but has never courted the media,” noted Rupert Hoogewerf, founder of the Hurun Report, the China rich list.
Yuan was a local government official in Nanjing before he left to start his own business in 1993. On Sanpower’s website, he vows to run “an international enterprise of Chinese characteristics, to develop sustainably.” He is also known to combine Confucianism and Western management styles. House of Fraser is not his first overseas acquisition; in March, Sanpower acquired Natali Seculife, a leading Israel health and age care company.
Yuan is also known to have spoken favorably about investing in the service industry in Taiwan. “There’s nothing to fear,” the enterpriser says, “The strait should have more confidence and work together.”
The former government officer still works closely with the government and has a voice in policy. As a member of the national committee of Chinese People’s Political Consultative Conference (CPPCC), Yuan has spoken for enterprises like Sanpower.
“Companies with private ownership should play a bigger part in today’s China, and not just as sidekicks,” Yuan said during a 2014 CPPCC session. He also suggested that the government should give more support for Chinese enterprises investing overseas, under the Go Out policy.