House of Fraser's future is in doubt after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.
House of Fraser said in a statement: "House of Fraser is in discussions with alternative investors and is exploring options to obtain the required investment on the same timetable.
"Discussions are ongoing and a further announcement will be made as and when appropriate."
C.banner's investment was conditional upon House of Fraser, which employs more than 17,000 people, closing more than half its stores through the so-called Company Voluntary Arrangement (CVA).
However, the store closure programme was thrown off course when landlords issued a legal challenge, saying they were unfairly prejudiced by the process.
House of Fraser has previously described the restructuring proposal and investment from C.banner as the last viable option for the business, raising the prospect that it could now fall into administration.
However, it is understood that Mr Ashley is not involved in the current talks with House of Fraser’s management.
Other retailers undertaking CVAs in a bid to keep trading include New Look, Mothercare and Carpetright.
Restaurant businesses have also been seeking to cut their costs with store closure programmes, with Carluccio's, Prezzo, Byron and Prezzo all pushing through CVAs this year.
House of Fraser's collapse would mean major job losses for the retail sector, which has already been hit by a string of high-profile administrations from the likes of Toys R Us, Maplin, and Poundworld.