A Chinese investor behind a bid for House of Fraser has issued a profit warning, just weeks before a deal is expected to be finalised.

Fullshare owns 45% of Wuji Wenhua, which is trying to buy a majority share in House of Fraser from its current stakeholder, Chinese conglomerate Sanpower.

It issued a statement to the Hong Kong stock exchange, saying that it expected profits to be 30% lower than previously expected because an energy firm it acquired in 2016 is not yet profitable.

The company previously hit headlines last year when an American investment firm said that it was manipulating its share price, an allegation which Fullshare denied.

House of Fraser is struggling with a changing market and a downturn in consumer confidence.

Sanpower Group is in advanced stages of discussions to sell its 51 percentage points of its 89% stake to Wuji Wenhua.

The Chinese outfit acquired House of Fraser in 2014. At the time, the plan was to roll out 50 House of Fraser stores across China. So far, just one has been built.

House of Fraser has been grappling with a rapidly changing market, a store portfolio which consists of many unprofitable outlets and a drain of talent at the top.

All of the executive team at the time of the sale have now exited. The current team is led by Alex Williamson, who joined the department store last summer from Goodwood Estate.

The retailer was hit by a credit ratings downgrade in December and fared poorly over Christmas, when in-store sales shrunk 2.9% and online sales slumped 7.5% in the six weeks to December 23.

It has asked landlords for rent reductions to alleviate financial pressures and has appointed Rothschild to refinance £225m of its £390m debt, set to mature next July.