Bottom Line: Chinese ambition trumps a market return
ALMOST 25 years ago, a Hong Kong retail tycoon called Dickson Poon stunned London by taking a chance on Harvey Nichols – a fading department store in dire need of a makeover.
Poon was one of the first to spot a trend that now seems obvious; the Asian shopper’s thirst for designer labels that has stood the UK retail scene in such good stead for the past few years. Now, Yuan Yafei – a Nanjing-based businessman that few people in the UK had heard of until yesterday – looks set to follow suit, edging close to a deal that will see House of Fraser change hands, and keep the department store away from London’s public markets.
But unlike Poon, who overhauled Harvey Nicks and returned it to profit, Yafei already has a winner on his hands. Amid a sea of deep discounting last Christmas House of Fraser stood firm, and it paid off – sales were up more than seven per cent in the three weeks to 28 December, led by a huge surge in online orders.
The firm has been at the forefront of multichannel retailing for the past few years; building a dedicated site for mobile and touchscreen shoppers (which account for more than 50 per cent of its online traffic), establishing a standalone Ebay store and expanding distribution deals and warehouses that allow it to ship to the UK, Europe and, yes, China.
Such is its online presence that if House of Fraser were to float instead, it would be likely be seen alongside web players like Asos rather than traditional retailers. All of which makes the £450m that Yafei is believed to be paying sound rather reasonable. He may be a newcomer to the UK, but the Chinese businessman has proved himself a savvy shopper.