The struggling retailer has announced plans to shut 31 of its 59 stores and seek rent reductions on other outlets

House of Fraser is teetering on the brink of collapse after a Chinese investor pulled out of a deal to buy a stake in the ailing department store and inject £70 million of funding.

In a fresh setback to the chain, which has been fighting for survival since last year, C Banner, the owner of Hamleys toy shop, issued a profit warning and abandoned its plan to invest in House of Fraser yesterday.

House of Fraser now urgently needs to find a new investor prepared to inject funding, with Mike Ashley’s Sports Direct and Alteri, a specialist in retail turnarounds, thought to be in talks with the retailer.

Fears are growing that if House of Fraser is unable to find a new backer it could