House of Fraser has reportedly received a £30m injection of cash from its Chinese owners to shore up its financial position.
The department store was understood to have received £15m last week from Sanpower Group, which is controlled by Chinese billionaire Yuan Yafei, to pay landlords and concessionaires. According to The Sunday Times, Sanpower, is preparing to match that sum again shortly to provide the business with some working capital.
House of Fraser has been struggling of late. Last year a relaunch of its online platform proved highly disruptive and it has suffered from falling consumer confidence, reduced footfall on the high street and the migration of consumers online. Over the Christmas period it reported stores sales down -2.9% and online sales down -7.5%.
The retailer, which operates almost 60 stores nationwide, is undergoing a transformation programme under new CEO Alex Williamson who joined the business from Goodwood last year. It is attempting to offer a more experiential and digital-led customer experience, as well as offering more exclusivity in its product line-up.
Recently it appointed former Fenwick MD David Walker-Smith to the position of chief product and trading officer, replacing Maria Hollins who left in January.
The latest cash injection comes after Sanpower injected £15m into the business last September. It is reported that House of Fraser had recently approached turnaround specialists Alteri Investors, which is backed by US hedge fund Apollo Global Management, about a potential loan.
However the talks did not progress, it is believed, due to the structure of House of Fraser’s debt which includes a £175m listed bond and a £125m loan, plus a £100m bank facility from a syndicate led by HSBC and Industrial and Commercial Bank of China (ICBC), who already hold charges over House of Fraser’s assets.