Would-be rescuer C.banner International Holdings Ltd. shelved plans to raise funds for the purchase of a 51% stake in the British chain, citing a plunge in its own stock price over the past month.

(Bloomberg)—House of Fraser Ltd., No. 62 in the Internet Retailer 2018 Europe 500, needs a new lifeline after a Chinese retailer pulled its plan to buy a majority stake, leaving the U.K. department-store chain on the brink of collapse and threatening about 17,000 jobs.

Would-be rescuer C.banner International Holdings Ltd. shelved plans to raise funds for the purchase of a 51% stake in the British chain, citing a plunge in its own stock price over the past month. The company had pledged to pump 70 million pounds ($92 million) of fresh capital into House of Fraser after taking control from Nanjing Xinjiekou Department Store Co., a subsidiary of conglomerate Sanpower Group.

The company has total outstanding debts of 390 million pounds ($508.4 million), according to a June presentation.

EY is advising lenders and preparing a contingency plan in case House of Fraser collapses, according to two people familiar with the matter, who aren’t authorized to talk about it and asked not to be identified. The retailer is also in talks with potential investors including Alteri, Apollo Global Management LLC’s unit investing in distressed retailers, according to one of the people. The Telegraph reported on EY’s plans earlier, as did Sky News on Alteri’s plans, without saying where they got the information.

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“House of Fraser is in discussions with alternative investors and is exploring options to obtain the required investment on the same timetable,” the company said in a regulatory filing late on Wednesday.

House of Fraser’s struggle to raise cash is another dark turn in the British retail crisis, after the collapse of brick-and-mortar institutions such as Maplin Electronics, the U.K. arm of Toys “R” Us and department-store operator BHS. Store chains are being crippled by pressure from online retailers such as Amazon.com Inc., exacerbated by a rise in costs stemming from the pound’s Brexit-induced weakness. Clothier Next Plc’s sales growth fell short of estimates in the latest quarter, while retailers Marks & Spencer Group Plc and Debenhams Plc are shrinking store space.

Insolvency plan

House of Fraser was already seeking to shut more than half its department stores in the U.K. and Ireland through a British insolvency procedure.

C.banner controls brands such as Steve Madden and Badgley Mischka. Sales in its main shoe retailing business have slumped in the face of online competition, and the plan to buy control of House of Fraser had wiped out three quarters of its stock-market value.

Sanpower’s acquisition of House of Fraser in 2015 valued the British chain at around $623 million. At the time, Sanpower Chairman Yuan Yafei said the company would build 50 outlets in China under the name “Oriental Fraser.” Three years on, only two have opened and Sanpower has turned its attention to building a health-care business.

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