The owner of House of Fraser is in advanced talks over the sale of a 51 per cent stake in the business.
Nanjing Cenbest, a top department store in China, is set to sell the stake to tourism company Wuji Wenhua. Sports Direct boss Mike Ashley still has an 11 per cent stake in House of Fraser, which he bought in 2014. The retail tycoon also recently upped his stake in rival department store Debenhams to 29.7 per cent, just shy of the threshold at which he must launch a takeover bid.
A spokesperson for House of Fraser said selling a stake in the business to Wuji Wenhua would help with the department store's intention to increase its leisure offering in stores.
"This will have no impact on the day-to-day operations or strategic development of the House of Fraser business in the UK and Ireland. It is business as usual," the spokesperson said.
House of Fraser cut its promotional offers at the end of last year, leading to a 2.9 per cent drop in sales over the period leading up to Christmas. Online sales were down by as much as 7.5 per cent.
Alex Williamson, House of Fraser's chief executive, said the business should not attempt to "sell everything to everyone at any price".
The problems faced by the retailer worsened in February when it emerged a credit insurer had cut its cover on the store's stock, a decision which forces uncovered suppliers to demand upfront payments for products.