Buying House of Fraser isn't going to be as easy as it looks for Sanpower

The department store is owned by a merry band of investors, all of whom have different ideas about what should become of it. Good luck, Yuan Yafei.

by Emma Haslett
Last Updated: 24 Mar 2015

Cast your mind back, if you will, to 2008, and you will remember a glorious time for retail administrators: down went Woolworths, down went Zavvi, down went MFI - and while House of Fraser itself was still perfectly stable, the same couldn't be said for its owner, Baugur, which went into administration and ended up being rescued by Icelandic banking omnishambles Landsbanki.

Although Baugur still has a stake, the retailer is now also owned by a merry band of brothers, including chairman Don McCarthy (20%), Sir Tom Hunter (11%) and Karen Millen co-founder Kevin Stanford (9%)

As a consequence, the fact that Chinese billionaire Yuan Yafei's Sanpower has put in a £450m bid for the business is complicated, at best. Apparently McCarthy had accepted the deal last week, before he even took it to the other shareholders (many of whom would rather it were IPO’d).

'I think as chairman of the company [McCarthy] should offer to all the shareholders before accepting himself,' retail analyst Tony Shiret told the Times. 'It highlights some of the conflict of interest around some of these proprietorial arrangements. He has got a responsibility to the company, not just to any particular shareholder against any other.'

Yafei isn't the first to have a go at buying House of Fraser: French department store Galleries Lafayette and even our own Mike Ashley have both made bids, to no avail.

You can see why it's so popular: while everyone else was having a dreadful time over Christmas, sales at the retailer rose by 6.3%. And its online offering is impressive: so impressive it's quite often compared to online retail giant Asos rather than, say, John Lewis.

So there's no denying the fact that Yafei's decision is pretty savvy. And by convincing McCarthy he's made it further than any of his rivals. But buying House of Fraser is going to be a long, slow process...

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