Sanpower, the Chinese conglomerate chaired by Yuan Yafei, bought House of Fraser in 2014 through its subsidiary Nanjing Xinjiekou, which operates a chain of department stores in China's Nanjing province.
The company is currently exploring a "cooperation arrangement" with Hong Kong-listed shoe retailer C.Banner, which "may eventually lead to an acquisition" of a stake in House of Fraser, according to a statement on the Hong Kong stock exchange.
C.Banner, whose chairman Chen Yix reportedly has family ties to Yuan Yafei, bought Hamleys from Ludendo last year and plans to open the toy store's first China outlet in September inside a new House of Fraser flagship – called Oriental Fraser – in Nanjing.
It said a strategic alliance with House of Fraser's parent company Highland group could help give the two businesses "greater bargaining power" with suppliers and help grow their brands.
"The company and Nanjing Xinjiekou are currently exploring possible structures for their cooperation and no agreement has been reached in respect of the acquisition of an interest in Highland Group by the company," C.Banner said.