C.banner decision a hammer blow for House of Fraser

House of Fraser is on the brink of collapse, with Chinese investor C.banner pulling out of a rescue deal.

The company has released a statement confirming it no longer intends to go ahead with plans to buy a 51% in House of Fraser. It had previously planned to inject £70 million of new capital into the struggling retailer.

The crisis that House of Fraser now finds itself in reflects the inability of older institutions to move as fast as modern e-commerce sites, argues ParcelHero’s Head of Consumer Research, David Jinks. “In order to survive, House of Fraser needed a £70 million investment promised by C.banner, or hope Sports Direct founder Mike Ashley (who already holds 11% of HoF shares) would make a much-needed loan. But apart from needing an urgent cash injection, the true heart of the problem for House of Fraser is outdated stores and an even more outmoded website.”

A report released by ParcelHero in May, Departing Department Stores, singled out House of Fraser for criticism because of its antiquated web integration. Ordering furniture such as most of its online sofa range involves leaving the main site altogether and linking to a ‘white label’ site operated not by House of Fraser, but by a ‘rival’ furniture site, A. Share & Sons site – best known for its ScS branded stores.

“So clunky is the integration that Items placed in main site ‘bag’ do not appear in A. Share & Sons site ‘basket’ and vica versa; meaning it’s not even possible to buy clothes and furniture in the same transaction,” says Jinks.

“It is to be hoped House of Fraser resolves its funding issues successfully, but even if it does manage to secure funding, through Mike Ashley or even a possible merger with Debenhams, it must still close the 31 stores it plans to axe and drag its web functionality into the 21st century. Only then can HoF offer the seamless bricks and clicks multi-platform approach to sales that is essential for modern retailers,” he concludes.