David Ross, one of the co-founders of Carphone Warehouse, is piecing together a rescue deal for Jigsaw, the womenswear retailer.
Sky News has learnt that Mr Ross, who has a portfolio of property and business investments, is in talks with Jigsaw’s controlling shareholder, John Robinson, about an agreement that would help salvage the chain’s future.
City sources said a deal could be tied up as soon as next week, although they cautioned that it had yet to be finalised.
Mr Robinson, who is understood to have known Mr Ross for years, has been hunting new investors for the business since last autumn.
A number of parties, including Aurelius Advisers, an investment firm, and Foschini, the South African owner of Hobbs, Phase Eight and Whistles, expressed an interest in Jigsaw.
The fashion retailer is said to need an investment of at least £10m following a “cash pinch” in the run-up to the crucial Christmas trading period.
If the deal goes ahead, Mr Ross would probably commit several million pounds to Jigsaw, while a new lender is said to have been lined up to provide debt in place of Barclays, the company’s existing lender.
Jigsaw, which trades from about 80 standalone stores, reported a 7% rise in sales in the five weeks to 31 December, but has been hurt in recent months by higher import costs and its foreign currency exposure.
Figures published in the autumn by the CBI, the employers’ group, showed retail sales falling at their steepest rate since the last recession, underlining the headwinds confronting many chains.
New Look, the fashion retailer, is exploring a restructuring deal that would see it exiting about 60 stores, while House of Fraser has asked landlords to agree a series of rent cuts.
A number of other womenswear businesses have also been on the market in recent months, although Aurora Fashions, which owns Coast, Oasis and Warehouse, has struggled to attract a buyer.
Mr Robinson launched the Jigsaw brand in 1970, with its first store opening in Brighton.
KPMG has been overseeing the process on behalf of Mr Robinson.
A Jigsaw spokesperson said in October: “Jigsaw has made no secret of the fact it is open to strategic investment to drive ongoing expansion.”
Mr Ross declined to comment.