%VIRTUAL-SkimlinksPromo%Department store chain House of Fraser was today being linked to a £450 million takeover by a conglomerate little known outside China.
Nanjing-based Sanpower, which has more than 100 businesses in mainland China including shopping centres, is in advanced talks over a surprise swoop for the UK high street chain, the Sunday Times said.
The discussions have been taking place as House of Fraser also considers a separate plan for a summer flotation on the London Stock Exchange.
However it is believed that Sanpower's offer has already been accepted by House of Fraser chairman Don McCarthy, whose family control 20% of the UK company.
The proposals are now being presented to other shareholders, including Icelandic banks and Scottish entrepreneur Sir Tom Hunter, who holds a stake amounting to more than 10%.
House of Fraser, which generates sales of £1.2 billion a year and employs 7,300 people as well as 12,000 concession staff at 61 stores, has held a protracted search for new investors in the last year.
France's Galeries Lafayette, which has 65 stores, had exclusivity on talks with House of Fraser until the end of January. The chain is also believed to have held informal takeover talks with Sports Direct tycoon Mike Ashley.
The department store retailer, which is 161 years old, first listed on the stock market in 1948 and remained a public company until it was bought by Mohamed al-Fayed in 1985.
It was listed again in 1994 before being snapped up in 2006 by a group of investors led by Icelandic tycoon Jon Asgeir Johannesson's Baugur Group in a £350 million deal.
Sanpower is run by tycoon Yuan Yafei, whose empire spreads across finance, property, media, transport and IT and now employs 30,000 people with assets worth nearly £5 billion.
Today's report said the business is planning to inject £70 million to £80 million into House of Fraser in order to finance a wide-ranging store revamp and website improvements.
The tycoon may also take the department store into China by opening new stores or changing some existing sites to the House of Fraser name.
House of Fraser declined to comment today.
High Street casualties
Chinese tycoon offers to buy House of Fraser for £450m
Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.
Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.
The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.
Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.
Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.
La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.
Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.
Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.
Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.
Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.
The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.
Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.
Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.