ITS windows are plastered with dramatic "70 per cent sale" signs and shoppers could be forgiven for fearing the historic Edinburgh department store Jenners was the latest victim of the economic downturn.
But while this dramatic stock clearout is actually a direct result of a long-planned £3 million facelift for the iconic store, financial rumblings surrounding its parent company, House of Fraser, have fuelled chatter over the future of the entire chain.
Reports that House of Fraser could be hard hit by the Icelandic banking crisis through its majority shareholder – crippled Icelandic retail investor Baugur – yesterday prompted the company to publicly distance itself from the troubles.
But in the coffee shops of Edinburgh, the debate is more focused on what will become of the city's beloved "grand old lady" of retail, which first opened its doors 170 years ago.
The prospect of such a threat to the venerable store is one which would never have arisen before three years ago, when the family business was sold to House of Fraser.
Before then, Jenners had been fiercely independent, founded by Charles Jenner and his friend Charles Kennington and passed down through the family until its sale to House of Fraser in 2005.
But its potential exposure to the collapse of global markets serves to illustrate how the tentacles of the financial meltdown are reaching across the planet.
Substantial amounts of Baugur's debt were held with Iceland's failed banks, while the biggest shareholder in the now-nationalised financial institution Glitnir was the investment company Stodir – itself owned by the billionaire Baugur chief, Jon Asgeir Johannesson.
Baugur yesterday denied rumours that it was to put its UK business – including House of Fraser – into administration.
But billionaire retail tycoon Sir Philip Green is understood to be considering buying up about 40 per cent of Baugur's debt in a move which would significantly strengthen his already impressive high-street portfolio, which includes such brands as Topshop and Miss Selfridge.
However, a source close to House of Fraser told The Scotsman that the company would not be sold.
"Baugur has no plans to sell off its share," he said. "Also, it only has a 35 per cent stake. Other shareholders together have much more sway over what happens. And there's no chance of House of Fraser selling Jenners separately – it is a very successful store."
While Baugur holds a 35 per cent stake in House of Fraser and Glitnir nurses a near 14 per cent share, House of Fraser points out that its expansion is not reliant on shareholder funding.
In fact, it has a "strong relationship" in terms of funding with troubled Scottish bank HBOS, which also happens to own a 5.6 per cent stake in the company through its Uberior investment vehicle.
Don McCarthy, the chairman of House of Fraser – which is owned by private investors and is therefore not obliged to give public updates – yesterday issued a bold warning against "dangerous talk" fuelling concerns in the industry.
He said: "As the economic crisis in Iceland deepens, the speculation continues to rise on the likely impact on Baugur and its future.
"From time to time this speculation has enveloped House of Fraser.
"I felt that it was again important to clarify the independence of House of Fraser from these issues and to emphasise that they have no impact on the strength of its business, its operations or its trading performance."
He added: "While we remain positive that the situation will be resolved, it is important to understand our distance from these events."
But although House of Fraser recently reported a 2.9 per cent rise in group sales in the 26 weeks to 26 July, the "Harrods of the north" could be seen as a sitting duck for the ill effects of the well-documented slowdown in the luxury goods sector.
The store's wood-panelled halls are laden with top-of-the-range cosmetics, designer clothing and sumptuous home accessories, all screaming opulence – perhaps not the watchword of the credit crunch.
BACKGROUNDSET up by Charles Jenner in an attempt to smarten up "unfashionable" Edinburgh women, Jenners has been a Princes Street institution since 1838.
Jenner, who worked at the Waterloo Place drapers of W&R Spence, was sacked with his friend Charles Kennington for taking a day off to go to Musselburgh races.
The pair started the business, and at first money was so scarce Jenner had to sleep on an undercounter mat.
The current landmark building was built in 1895 after a fire destroyed the original building three years earlier, sustaining losses – at today's prices – of well over £10 million.
However, Jenner had insured his business with 23 separate companies and was trading again within weeks.
Kennington died in 1893 and worker James Kennedy became a partner in the business. His descendants were the Douglas Miller family, who owned the business until the sale to House of Fraser in 2005.
