House of Fraser to push luxury Chinese products in the UK

House of Fraser will begin stocking “premium Chinese brands” in its department stores as part of an effort by its parent company to burnish the image of goods made in China and support Beijing’s trillion-dollar “Belt and Road” international trade plan.

Sanpower, which bought House of Fraser in a £480m deal in 2014, said it hoped to harness the reputation built by the department store chain over 169 years to help persuade UK shoppers to buy luxury Chinese goods.

The company did not name the brands destined for its 59-store network but said they would include everything from lingerie to electrical appliances.

Sanpower’s billionaire chair, Yuan Yafei, is expected to espouse the merits of the plan at a meeting in Shanghai on Thursday with the Scottish first minister, Nicola Sturgeon, who is hoping to bolster Sino-Scottish trade relations.

The move comes as House of Fraser’s financial health is under scrutiny after dismal Christmas sales and widespread malaise among UK high street retailers.

“The traditional image associated with ‘Made in China’ is changing,” said Simon Pickering, House of Fraser’s UK director of global product sourcing.

“Increasing numbers of high-quality Chinese products are becoming popular with British and European consumers. Once these products enter House of Fraser’s sales channel, they will be able to access Europe and the greater global market, given quality and credit endorsement from House of Fraser.”

Sanpower said this would help support the one-party state’s Belt and Road initiative, which aims to build a modern-day Silk Road of infrastructure bringing Chinese goods to the world through a vast web of trade partnerships.

China’s head of state, President Xi Jinping, recently pledged $126bn (£89bn) to support the policy but has been forced to defend against suspicion about China’s intentions.

“The Belt and Road initiative is not a Chinese plot, as some people internationally have said,” he told the state’s official news agency, Xinhua, this week.

“It is neither the post-world war two Marshall plan, nor is it a Chinese conspiracy. If you had to [call it something], it’s an ‘overt plot’.”

Sanpower bought House of Fraser in a deal worth £480m in 2013, but was recently rumoured to be seeking to sell its majority stake to the Chinese tourism group Wuji Wenhua amid concern about flagging sales.

But sources close to the company have since insisted that Yuan is committed to long-term ownership of House of Fraser.

At a meeting with the UK’s international trade minister, Liam Fox, in Hong Kong this month, the Chinese entrepreneur said he planned to invest in House of Fraser.

The Guardian revealed after the meeting that the Nanjing-based Sanpower was to inject £15m into House of Fraser. A further £15m investment has reportedly been agreed since then.

Yuan is expected to make similar promises to those offered to Fox during Thursday’s meeting in Shanghai, scheduled as part of Sturgeon’s trade mission.

Sturgeon’s Glasgow Southside constituency is not far from the site of the drapers shop that opened in 1849 and eventually grew into the nationwide House of Fraser chain.