The investment bank Goldman Sachs is in talks to become the biggest shareholder in Peacoks, the debt-laden fashion chain.
Peacocks is labouring under debts of £240m and falling sales, as consumers cut back.
Goldman Sachs has significant exposure to Peacocks' debt and is a small shareholder. The Wall Street bank plans to write off some of its debt in return for a bigger stake. Peacocks, which has 550 stores, was taken private in a deal in 2006 backed by the hedge funds Och-Ziff and Perry Capital.