Hamleys, the 255-year-old toy retailer, is in "advanced" talks to be sold to a Chinese women's footwear business for £100 million.
Hong Kong-listed C.banner International Holdings confirmed discussions with Hamleys' owner, French retailer Groupe Ludendo, have "reached an advanced stage".
The Chinese shoemaker added it was "in the process of negotiating and finalising the definitive documentation with a view to entering in to a legally-binding agreement in the near future".
The deal for the retailer - known as the oldest toy shop in the world - comes during Chinese president Xi Jinping's state visit to the UK which should seal more than £30 billion of bilateral trade deals.
Hamleys is best known for its flagship store on Regent Street in London but has branched out to countries such as India, South Africa and Saudi Arabia in recent years. It opened a store in Moscow this April.
Groupe Ludendo bought Hamleys in 2012 for £60 million.
Prior to that, the toy store was acquired by Iceland's retail conglomerate Baugur Group for £59 million in 2003. It was then taken over by Icelandic lender Landsbanki - which was itself later nationalised - when the retailing group collapsed during the 2008 financial crisis.
Hamleys was launched as Noah's Ark in 1760 by William Hamley, a Cornishman from Bodmin, who sold tin soldiers, wooden horses and rag dolls.
In 1881, a new branch of the shop opened in Regent Street, although at a different location from the current shop.
Hamleys was issued with a second royal warrant by the Queen, who bought toys there for her children in 1955.
C.banner claims to be the second largest retailer of middle-to-high-end women's formal and leisure footwear in China. The business has a market capitalisation of around £536 million.
In recent years the firm has branched out into the distribution of other international brands, such as French Connection.
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