Jo Whitfield, the former Co-op supermarkets chief, is the frontrunner to become the next boss of Matalan after the homewares chain's takeover by a group of its lenders.
Sky News has learnt that Ms Whitfield, who left the mutual last year after missing out on the top Co-op Group job, is in detailed talks with Matalan's new owners about becoming its next chief executive.
She is understood to be vying with Nigel Oddy, Matalan's interim CEO, for the permanent role.
Appointing her would represent something of a corporate and personal homecoming for Ms Whitfield, who hails from St Helens, which is just 11 miles from Matalan's Skelmersdale head office.
She was previously a finance executive at Matalan in the early 2000s.
The talks about appointing a new boss follow a recapitalisation which resulted in founder John Hargreaves relinquishing control of the chain last month.
A group of institutional investors including Invesco, Man GLG and Tresidor agreed to sanction a £257m debt-for-equity swap and inject up to £100m of new capital into the business.
Matalan employs more than 11,000 people and trades from 230 UK stores.
It also operates an e-commerce platform and has more than 50 overseas franchise stores.
The company claims to have 11 million customers.
A spokesman for Matalan declined to comment.