London - C.banner International, the Chinese owner of Hamleys Toy chain, is said to be in discussion to acquire a stake in department store group House of Fraser according to a report.

A statement released onto the Hong Kong Stock Exchange on April 24 said that C.banner entered into a memorandum of understanding with Nanjing Xinjiekou Department Store for the potential acquisition of a 51 percent stake in House of Fraser Group Limited, by either purchasing existing shares from Nanjing Xinjiekou or by subscribing for new shares in House of Fraser.

Nanjing Xinjiekou currently holds an 89 percent stake in House of Fraser and is owned by Sanpower, the Chinese firm that acquired House of Fraser Group in 2014 for 480 million pounds. The statement did not reference the previous agreement that Sanpower made to sell a stake to Chinese tourism group Wuji Wenhua, although talks with Wenhua are said to be well underway.

C.banner International is primarily a manufacturer of women’s branded footwear in China and noted that the acquisition of a stake in House of Fraser “would mark an important step towards the implementation of the company’s global branding strategy, which leverages the brand recognition effect of world-renowned brands.”

The company added that the potential acquisition would also “further enhance” its influence in the retail market in China, help it lay solid groundwork for new operations overseas and lead to synergies between new and existing operations. The Hong-Kong listed firm added that any deal would remain subject to due diligence on House of Fraser’s assets, liabilities, operations and financial and legal affairs.

The move comes a week after House of Fraser hired KPMG to advise on a restructuring place, which may see a number of stores closed and jobs cut. Earlier this year House of Fraser sought out rent reductions in a number of its stores from landlords, following weak Christmas trading.