How House of Fraser went from a drapery shop on to a household name

How House of Fraser went from a drapery shop on a Glasgow street corner in 1849 to a household name on the brink of calamitous administration that would imperil 17,000 jobs

  • Tensions surfaced between company founders Hugh Fraser and James Arthur
  • The partnership was dissolved and Fraser assumed control of the retail business
  • Fraser’s son Hugh Fraser II introduced its famous stag’s head emblem 
  • Family business survived Hugh Fraser’s death and economic recession of 1920s

Shoppers regarded its stores as the place to go for everything from cosmetics to beds, high fashion, food and even the latest hostess trolley

From humble origins as a drapery shop on a street corner 169 years ago, House of Fraser grew into a household name – the place for shoppers to go for everything from cosmetics and fashion to furniture and gadgets such as the Hostess trolley.

It was founded as Arthur & Fraser in Glasgow in 1849 by Hugh Fraser, a drapery warehouse manager, and James Arthur, a shopkeeper who bought stock from the warehouse.

Their store was a success and they established a wholesale trade next door. 

But in 1865, they fell out and the partnership was dissolved. Fraser assumed control of the retail businesses, while Arthur took over the wholesale side. 

Under Fraser’s son – who introduced its famous stag’s head emblem, which was to represent it for nearly eighty years – and grandson, both also called Hugh, the business survived the Great Depression of the 1920s and ’30s. 

It bought dozens of rivals and was renamed House of Fraser. It acquired its first outlet in England in 1951 and in 1959 bought Harrods, putting House of Fraser at the top of the retail world. 

Showpiece: House of Fraser’s Glasgow store in the 1960s featured an array of vehicles

Hugh Fraser III was made Lord Fraser of Allander in 1963 but died three years later and was succeeded by his son, Sir Hugh Fraser.

Flamboyant, dashing and enterprising, Sir Hugh, who took calls on a Bugs Bunny phone in his office, had previously worked closely with his father, who made him a director at the age of 21. 

Determined to move away from the old-fashioned image of the group’s stores, Sir Hugh converted the original Fraser store in Glasgow into a high-class fashion shop for well-to-do young women, and began to introduce boutiques into other stores.

Hugh Fraser 1st Baron Fraser Of Allander, centre, is pictured above with models at a fashion show at Kalvin Hall in Glasgow

After his father’s death, Sir Hugh embarked on a vigorous policy of expansion. 

During the 1970s more than 50 stores joined the group, including the acquisition of E Dingle & Co in the South West, James Howell & Co in Cardiff, and the Army & Navy stores in southern England.

Between 1966 and 1973, sales doubled to over £200 million, and profits doubled to over £10million. 

But after 1974, Sir Hugh was hampered by the worldwide recession following the rise in oil prices.

He became increasingly addicted to gambling and a Stock Exchange enquiry in 1976 revealed that he had been selling House of Fraser shares to finance his gambling. 

Sir Hugh Fraser, 2nd Baronet (1936-1987), chairman of the House of Fraser department store group, talks with customers at the company’s Barkers store in Kensington High Street, London on October 13 1967

In 1976, he was fined £600 under the Companies Act for the misclassification of a loan, and for improper share dealings. 

Sir Hugh lost the support of the directors, and was removed as chairman in 1981. He then increasingly devoted his time to working hard on behalf of the Hugh Fraser Foundation, the charitable trust set up by his father, to fund medical research in Scotland.

Developments at the House of Fraser during the 1980s included the introduction of ‘Lifestyle’ merchandise ranges to attract younger customers and a huge investment in store refurbishment nationwide. 

In 1983 the Frasercard, valid at all stores, was introduced to replace the existing charge accounts for customers.

Richard Hyman, who has analysed the retail sector for more than 30 years, attributes House of Fraser’s current difficulties to a lack of investment

Following Sir Hugh’s departure, a four-year struggle for control of the group began with corporate raider Tiny Rowland, who wanted it for his conglomerate Lonrho.

House of Fraser’s new chairman Sir Roland Smith resisted Rowland’s attempts to unseat him. But then in 1985 Smith recommended to shareholders that they should accept an offer from Egyptian tycoon Mohamed Al-Fayed and his brothers.

The Al-Fayeds had purchased a 30 per cent stake in House of Fraser the year before from Rowland. In 1985, the brothers bought the remaining 70 per cent of House of Fraser for £615 million. The company’s stag’s head logo was replaced by a stag leaping from a triangle.

In 1994, House of Fraser was floated on the London Stock Exchange for £484 million, except for Harrods which was kept in the private ownership of the Al Fayed family.

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During the 1990s, the company experienced difficult times, closed stores and cut nearly 1,000 staff. It also began to move direction into high-margin private label brands aimed at ‘fashion lovers, smart career movers, and quality classics’.

House brands including womenswear, menswear and homeware collections by Linea and a womenswear collection by Therapy were launched between 1997 and 2000. In the early 2000s Jenners and Beatties department stores became part of the House of Fraser brand.

But having weathered so many storms, in 2014 it became the latest UK household name to be sold to the Chinese, when a £50 million sale was agreed with Sanpower, owner of a leading Chinese department store.

By then, House of Fraser had 61 stores in Britain and Ireland as well as one in Abu Dhabi and annual sales of about £1.2 billion. Sanpower had plans to expand it into other countries.

Picture from 1937 shows the store frontage decorated for the coronation of George VI 

Now House of Fraser, one of Britain’s oldest and most-loved department store chains, has less than two weeks to stave off collapse following today’s announcement that it has set a deadline of August 20 to secure fresh funding.

Richard Hyman, who has analysed the retail sector for more than 30 years, attributes House of Fraser’s current difficulties to a lack of investment, declining relevance with shoppers, a lack of brand differentiation and a failure to focus on the store’s core customer.

Yesterday he said: ‘House of Fraser has been a weak player for many, many years and gone through various different owners who have had varying degrees of commitment to the business.

‘It’s very difficult to see how this business will survive longer term. It is very much on borrowed time and has been for quite a while.

‘It’s a moot point whether it’s now in the last chance saloon – or the room beyond the last chance saloon.    

House of Fraser now just 10 days from going under

By James Burton, City Correspondent

The fate of beleaguered department store chain House of Fraser will be decided in ten days – when a major bill falls due.

Four City bidders have filed last-ditch rescue plans to save the company, with possible buyers including Sports Direct owner Mike Ashley and billionaire retail tycoon Philip Day.

A decision on their plans is expected within 48 hours. The 169-year-old retailer’s owners are scrambling to find funding before August 20 when concession holders are due to get a multi-million pound payment from the business which it cannot currently afford.

Without a white knight investor, the chain is likely to go bust – putting its 59 stores and 17,500 jobs at risk.

House of Fraser is scrambling for cash as without a white knight investor, the chain is likely to go bust

Bosses had hoped to stave off disaster after years of declining sales by closing 31 shops – many dominating high streets – and re-negotiating rents on the remaining ones. 

But this plan depended on getting a £70million injection from Chinese company C Banner, and earlier this month the rescuer pulled out due to its own financial problems.

It plunged the company into a new crisis and sparked a frantic search for another saviour.

House of Fraser has put out a statement saying discussions with creditors and possible backers are continuing.

But industry experts believe a collapse is increasingly likely. Richard Lim, of consultant Retail Economics, said: ‘House of Fraser is in desperate need of a rescue deal and, without it, it’s inevitable that the business will fall into administration. 

House of Fraser’s flagship store in Oxford Street (pictured) was one of those set for closure

‘The deadline they’ve announced puts a line in the sand for when that must be done, but I think it’s going to be incredibly difficult.

‘Department stores are incredibly hard to run and they’re battling against higher minimum wages, increased rents and rising business rates at a time when consumers have changed the way they spend their disposable income.

‘For an investor to come in at this late stage is looking less likely by the day.’

House of Fraser has been owned since 2014 by Chinese billionaire Yuan Yafei.

Bosses are still hoping a rescue can be secured, with possible saviours thought to include Edinburgh Woollen Mill owner Mr Day and Sports Direct. They are seen as the front-runners, although investment firms Alteri and Endless are also understood to have submitted bids.

Accountant PwC, which is advising House of Fraser’s creditors, reportedly told bidders to submit their final offers by yesterday lunchtime.

If no deal emerges then the whole firm will fail, with all staff laid off. But even if a buyer is found, the deal could still involve administration – a legal process which could allow House of Fraser to ditch expensive burdens such as its pension scheme.


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