Selfridges, owned by Canadian billionaire Galen Weston, is understood to be among the bidders for US department store chain Marshall Field's.
Selfridges was opened in 1909 by Gordon Selfridge, a former junior partner at the Marshall Field's store in Chicago. Marshall Field's used the overhaul of Selfridges in the mid-1990s as the basis for a makeover of its own, which began last year.
In March, Marshall Field's owner Target Corporation, one of the world's biggest retailers with sales of more than US$48 billion (£27 billion), put its department store division up for sale following years of poor results.
Local press reports quoted sources close to the sale talks as saying Selfridges' holding company Oxford Acquisitions and May Department Stores have both expressed interest.
Bloomingdales parent Federated stepped forward as a potential participant in the bidding process last month.
Venture capitalists Kohlberg Kravis Roberts and Blackstone Group have been identified separately as possible bidders for the 266-store, middle-market Mervyn's, also part of Target's department store division.
Target appointed investment bank Goldman Sachs to seek out potential buyers earlier this year. Target chief financial officer Doug Scovanner said in March that the value of the two divisions was estimated to be US$1.8 million (£1.01 million).
He said of the sale: 'Both these divisions have experienced significant challenges to top-line growth, resulting in unfavourable trends in their financial performance.'
Analysts have complained that the department store division distracts management from the core Target business.
Selfridges chief executive Paul Kelly was not available for comment.