Nanjing Xinjiekou has bought an 89% stake in House of Fraser

Nanjing Xinjiekou has bought an 89% stake in House of Fraser

The Shanghai-listed retail arm of Chinese conglomerate Sanpower Group has secured an 89% stake in UK department store retailer House of Fraser.

Nanjing Xinjiekou Department Store Co., signed the definitive agreement late last week in a deal worth GBP480m (US$803m). The two companies were reported to have been in talks over a potential deal for some months.

Yuan Yafei, chairman of Sanpower, said the acquisition is "a landmark transaction" for a Chinese listed company.

"House of Fraser is a strong and iconic heritage brand in the UK and abroad, with exceptional fashion credentials. With House of Fraser, we see significant opportunities to develop the business further and replicate the already successful model in international markets, in particular in China."

The acquisition marks the largest cross-border direct acquisition by a Chinese non-state-owned A-share listed company, and the largest overseas acquisition in the retail sector by a Chinese business.

House of Fraser executive chairman Don McCarthy, added: "Our announcement opens an extremely exciting chapter in the story of House of Fraser. The acquisition by Nanjing Cenbest will allow House of Fraser's management team to continue to grow and invest in the business in the UK and Ireland, provide a strong platform from which to expand the brand in international markets and to further develop our multichannel, stores and premium fashion offering."

McCarthy will step down as executive chairman of House of Fraser upon completion of the transaction, which is expected to close in around four months.