Hamleys’ owner C Banner International Holdings (CBIH) has entered into discussions to purchase a stake in House of Fraser, as the struggling department store fights to stay afloat.
According to the Press Association Nanjing Xinjiekou, a subsidiary of Sanpower which has been looking to offload some of its 89 per cent stake in House of Fraser since March, has signed an agreement with CBIH.
The two Chinese firms signed a memorandum of understanding (MoU) this morning in Hong Kong signifying that they have entered into talks about a sale.
Although talks are understood to be in their early stages, a further announcement from both companies about the deal is expected later today.
Last month it was revealed that Nanjing was also in talks with Wuji Wenhua, a Chinese tourism company, to sell a 51 per cent stake in the retailer.
Sanpower has already pumped £30 million into House of Fraser and its leader has said it is committed to turning the business around. However, this latest news will cast doubts on his pledge.
This comes amid troubled times for House of Fraser, which called in KPMG last week to discuss a restructuring strategy, including a possible CVA.
House of Fraser has announced a string of troubling financial news since the start of the year, following a 2.8 per cent drop in sales over the vital Christmas period.
In February credit insurers cut ties with the retailer refusing to cover its suppliers over fears it could go under. Weeks later it hired Rothschild to help it restructure its £400 million debt pile.