The owner of Hamleys has confirmed it is to take majority ownership of House of Fraser and will oversee a sweeping store closure programme.
C.banner, the Chinese retailer behind Hamleys, said it would buy a 51 per cent stake in House of Fraser from its parent Nanjing Cenbest, with £70 million changing hands in the process.
C.banner has also committed to making a significant investment into the business.
However, the sale is conditional on House of Fraser shutting stores.
The chain has four stores in Scotland.
Two of those are in Edinburgh, with the historic Jenners department store owned by the chain and a separate House of Fraser outlet on Princes Street in the capital’s West End.
Glasgow also has a House of Fraser store on Buchanan Street, while there is also an outlet in Dumbarton.
House of Fraser has 6,000 employees and 11,500 concession staff, with millions of pounds having been pumped into the retailer to keep it on an even keel.
Edinburgh-based firm Parabola bought the House of Fraser store on Princes Street in January after a fierce bidding war.
Agents handling the sale of the site, which has had a department store on it since 1894, said at the time the building had finally gone for a price “significantly in excess” of its £13.7m price tag.
The 59-strong chain will put forward a restructuring plan known as a company voluntary arrangement (CVA), which will require the approval of landlords and bondholders.
Frank Slevin, chairman of House of Fraser, said C.banner’s acquisition was “a step to securing House of Fraser’s long-term future”.
“C.banner’s investment is a vote of confidence in our prospects,” he said.
“We know that if we are to deliver a sustainable, long-term business then we need to make difficult decisions about our under-performing legacy stores.
“I am all too aware that this creates uncertainty for my colleagues in the business and so we will be transparent with them throughout the process.”
House of Fraser’s troubles came to the fore in January after it suffered a drop in sales over Christmas and started talking to landlords about reducing the size of its property portfolio.
KPMG has been drafted in to advise House of Fraser on its restructuring proposal, with the terms of the plan likely to be finalised at the beginning of next month.
House of Fraser is a subsidiary of Sanpower, a Chinese conglomerate chaired by Yuan Yafei.
Mr Yuan has voiced his commitment to House of Fraser, which has 6,000 employees and 11,500 concession staff, and has been pumping millions of pounds into the retailer to keep it on an even keel.
Several household names have pursued CVAs so far this year in a bid to save costs, including New Look, Carpetright and burger chain Byron.