House of Fraser is planning to invest as much as £35m in digital challenger bank Tandem as part of a tie-up that will see the upstart lender offer services to shoppers at the department store chain.
The retailer, which was bought by Chinese conglomerate Sanpower in a £480m deal in 2014, is planning to offer “financial solutions” to its customers through Tandem. The chain will outline more details of the partnership when it lays out its broader five-year strategic plan in the first-half of next year.
It comes after Tandem, which secured its banking licence a year ago and now offers savings accounts, in November started to roll-out its smartphone app, which allows users to keep track of their spending from any bank account. It plans to launch current accounts and credit cards next year.
House of Fraser already offers credit and loyalty cards through NewDay. The company’s “initial commitment” to inject up to £35m in Tandem is subject to unspecified preconditions.
Frank Slevin, the retailer’s chairman who is a former senior HSBC banker, said: “House of Fraser is committed to a transformation of its business over the next five years and this new partnership is just one illustration of how we’ll deliver a meaningfully different set of services to our customers.”
Sanpower's acquisition of 89pc of House of Fraser is yet to spark a return to profitability at the chain.
In 2015, House of Fraser suffered its fifth consecutive year of annual losses. It also delayed opening its first store in China a number of times, with its maiden site only launching in Nanjing last week.
The retailer's progress has been marred by a series of senior management departures, including the recent resignation of chief executive Nigel Oddy, who will leave next year.
As well as the disruption caused by the change at the top, House of Fraser also warned earlier this year that it faced "challenging trading conditions".
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