British maternity and babywear business Mamas & Papas could secure a £20m cash injection from Liberty owner BlueGem.
The private equity owner of the London department store has been granted a period of exclusivity to hammer out a potential deal, The Daily Telegraph has reported.
The size of the stake that BlueGem could take in the retailer in return for the cash investment is not yet known.
It is believed £12m of the potential £20m would be used to bolster business activities with the remaining £8m used to pay off a shareholder loan owed to David and Luisa Scacchetti, who founded the retailer in 1981 in Huddersfield. Mamas & Papas’ main creditor is HSBC bank.
The nursery brand returned to the black last year after reporting a £1.2m loss in 2012. It reported sales of £108m and earnings of £5m last year.
The chain has 70 stores across Britain and trades in 59 overseas markets, including Russia, China, Japan and South Korea.