House of Fraser is to join the growing list of retailers seeking to float on the London Stock Exchange after talks with French rival Galeries Lafayette came to an end.

The department store chain is set to push ahead with a listing that could value it at about £350m, probably in the second half of this year, said people familiar with the situation.

The Financial Times revealed last month that House of Fraser was in exclusive talks with Galeries Lafayette.

However, House of Fraser continued to keep open the option of floating, appointing banks to advise it on a possible stock market listing.

Galeries Lafayette had exclusivity until the end of this month.

The British retailer has now decided to press ahead with a listing, after strong Christmas trading and amid a buoyant IPO market. It is thought to believe that it could obtain a better valuation from a listing than a trade sale.

House of Fraser declined to comment on Thursday.

Hopes had been fading that a deal would be struck between House of Fraser and Galeries Lafayette after management changes at the French family-owned retailer.

One person familiar with the situation said this week that it had been “on a knife edge” as to whether House of Fraser would end up being sold or listed.

Earlier this month, House of Fraser appointed long-term lender HSBC and mid-market specialist Numis to advise it on the possible listing. Rothschild is managing the process.

House of Fraser joins a long list growing by the day of retailers that are seeking to tap investor appetite for consumer stocks amid expectations of a UK recovery.

Earlier this month, House of Fraser reported a strong performance over Christmas, in contrast to rival Debenhams.

House of Fraser said underlying sales for the three weeks to December 28 were 7.3 per cent higher than the year-earlier period. For the nine-week period, like-for-like sales rose 4.3 per cent. In the four weeks to January 4 like-for-like sales rose 8.6 per cent.

The end of the sale talks and expected listing comes at a delicate time for the department store sector. Sports Direct, controlled by Mike Ashley, has taken an interest in Debenhams – first through a direct stake and then a derivative arrangement. Dave Forsey, chief executive of Sports Direct, and Mike Sharp, chief executive of Debenhams, met on Thursday for the first time since Mr Ashley’s swoop.

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