House Of Fraser Enters China's New Market

House of Fraser, an old British department store, has not been moved since it was acquired by Limited by Share Ltd, Nanjing's Xinjiekou department store in Xinjiekou in April 2014. A year later, the Chinese name is "Orient Fred". The first batch of entity stores will be opened in Nanjing, Xuzhou and Chongqing. It is expected to open in the spring of 2016.

Site selection has abandoned the big cities such as Beijing, Shanghai, Guangzhou and so on. This strategy is quite different from the French Department of Lafayette department that has entered China and the British department store of Martha. Among them, the biggest reason for choosing Nanjing is based on the headquarters of Sanzhou group in Nanjing. The third group believes that because the existing resources of the holding group are mainly concentrated in Jiangsu area, Nanjing and Xuzhou become a convenient platform for management and resource integration.

"We will transform the New Oriental mall of Nanjing into a brand new brand. Oriental Fred Conduct business. " Hong Jianshan, executive vice president of Sanzhou group, said in an interview with an interface reporter.

As for the choice of storefront in Chongqing, Hong Jianshan said that it was the opportunity of investment. "When choosing the first store site, it happened that Chongqing had released appropriate investment news. Some people just sold their own real estate. Considering that Chongqing and other western central cities have developed rapidly in recent years, the market potential is huge, so this decision has been made."

But this does not mean that the East Fred project will deviate from the traditional consumption city instead of the second tier market. According to the three cell group, this is a long-term plan. The department store will enter Shanghai in the future and gradually enter the major provincial capitals. The timing of entering the market is mainly based on whether there is a good location in the city.

As the oldest department store in Britain, House of Fraser is also a supplier of Royal goods. In the privatization of capital operation in 2006, House of Fraser appeared to be making a profit predicament because of its huge interest bearing bonds. In 2014, Sanbao group beat the department store of the old Buddha department, bought over House of Fraser89% stake of more than 450 million pounds (about 4 billion 148 million yuan), including 160 million pounds (1 billion 475 million yuan) debt in the transaction amount, and set the record of the largest acquisition of retail companies in China.

foreign country Department store Entering the Chinese market is usually very difficult. In 2013, 15 years ago, the French Department of French Lafayette returned to China and chose to open a new store in Xidan, Beijing. But until now, the flow of this shop is still very few. According to the financial report of I.T group of China joint venture company, Beijing's Buddha has lost 20 million Hong Kong dollars (about 16 million 10 thousand yuan) a year. And Britain Marks & Spencer There is also no good news. Recently, it also announced plans to close 5 stores in Shanghai by August 2015.

But Hong Jianshan believes that the three group will not worry about the predicament of their competitors. "We are using different business models. Orient Fred will operate 50% of its own brand, leaving the rest of its own brand, no longer through the intermediate links, thereby saving costs."

Hong Jianshan refers to the self operated brand, refers to the buyer selected goods. However, it is not easy to manage the buyer system properly, and the Department of general merchandise also has many difficulties. On the other hand, Marsha also has a large number of its own brands in China. It is hard to say that adding the two modes together will increase the chance of Eastern Fred.

In addition, the electronic business platform is still the market of "East Fred" project to seize. Nanjing Xinjiekou department store announced in February 4th this year that House of Fraser will invest $7 million with the three cell group to buy electricity in the West.

"Because the physical store has to wait until 2016, so we will use the electronic commerce platform to launch the House of Fraser products online first." Hong Jianshan revealed.