Business / Companies

Sanpower House Of Fraser purchase 'shows ambition'

By Mike Bastin (China Daily) Updated: 2014-04-15 07:15

Models poses at House of Fraser Vogue Fashion's Night Out at House of Fraser Oxford Street in London. [File photo/dfic.cn]

It is also a signal of a new, aggressively acquisitive Chinese corporate culture.

Also noteworthy here is the intention to bring the House of Fraser brand to the Chinaese mainland. China's burgeoning urban middle-class consumer base will welcome the prospect of such a prestigious foreign retail brand on their doorsteps.

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A Chinese company is certainly better placed to manage this introduction and expansion across Chinese cities.

Crucially though, it is the pledge by Sanpower to inject immediately 70 to 80 million pounds into the House of Fraser brand to finance a major store revamp and update the brand's web site. Until recently Chinese companies have perhaps failed to invest sufficiently in any branding or, in this case, the rebranding process.

Sanpower management have also hinted that they are prepared to waste no time in introducing the House of Fraser brand to the Chinese mainland with some existing store names simply replaced with the House of Fraser's.

In short, the audacity and speed of this cross-border takeover as well as the financial backing and commitment to build the brand bodes well for China and Chinese businesses as they expand inevitably more and more overseas.

Sanpower's recent strike also highlights a move away from the low cost-low investment business model for so long characteristic of China's corporations. Instead we have recently witnessed a far more modern approach to business and brand-building with long-term, strategic market-oriented thinking and significant financial commitment.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business.