The owner of clothing retailers La Senza and American Apparel has bought fellow fashion chain All Saints in a deal set to secure hundreds of jobs.
Investment firm Lion Capital has teamed up with American investor Goode Partners to buy the holdings of two Icelandic banks for an undisclosed sum.
All Saints, which employs about 2,000 staff and has 62 stores and 45 concessions in the UK, Europe, US and Russia, was reportedly facing administration.
The deal is understood to leave chairman and owner Kevin Stanford with a larger-than-expected 15% stake in the business.
Lion Capital, was co-founded in 2004 by Lyndon Lea, a former Goldman Sachs investment banker from Morecambe Bay, Lancashire. It recently sold Japanese noodle bar chain Wagamama.
All Saints was effectively put up for sale after nationalised Icelandic banks Kaupthing and Glitnir sought to realise some of their assets.
The banks came to own a majority stake in the business after the collapse of its previous owner, Baugur, an Icelandic investment group.
Baugur once owned much of the UK high street, including stakes in House of Fraser, frozen food chain Iceland, and Karen Millen-owner Aurora.
The new partnership is expected to ease some of the financial pressure on All Saints by paying off some of its £53 million debt pile.
Mr Stanford, who also co-founded the Karen Millen chain with his ex-wife of the same name, said: "I'm pleased to have the support of two private equity firms, both of which are focused on the consumer sector, to put All Saints on a solid financial footing."
All Saints was created in 1994 and opened its first stand-alone store in London in 1997. In its most recent financial year, the company had revenues of more than £200 million.
Mr Lea, partner at Lion Capital, said: "We are very excited to invest in a brand with such enormous international potential.
"All Saints, in our view, combines leading product and store design with an online presence well beyond many other retailers of its size. We look forward to partnering with Kevin and the management team to continue the success of the business."
Ken Dilley, Lloyds Banking Group's regional managing director, large corporate, said: "All Saints is a business with a great brand and a bright future.
"We've supported the company over the past two years and we have helped it through the difficulties of recent months.
"As part of the new deal with Lion Capital and Goode Partners we have agreed to carry on backing the business - and extend our funding - to help the company achieve its ambitions over the coming years."