House of Fraser has said it will cancel all online orders and refund customers after a dispute with its warehouse operator meant deliveries were delayed.
It follows an outcry from customers who had not received goods ordered online.
Its warehouse operator, XPO Logistics, stopped processing orders late last week because of a payment dispute.
House of Fraser has told over 1,000 suppliers it will not pay money owed before 10 August, when Sports Direct bought the chain out of administration.
On Wednesday, House of Fraser was forced to take its website down as deliveries began to back up.
XPO operates two warehouses, in Northamptonshire and Buckinghamshire, that handle all of House of Fraser’s deliveries to customers as well as to stores.
It is among a number of suppliers to have taken action as negotiations over payment continue with the department store chain.
According to reports, fashion brands Jigsaw and Karen Millen have removed some stock from their House of Fraser concessions.
Sports Direct is not legally obliged to pay suppliers money owed before its £90m buyout as their debts were part of the administration.
However, businessman Philip Day, who also wanted to buy House of Fraser, has said Mr Ashley should pay suppliers – who are said to be owed £70m – “in full”.
Sports Direct, which bought the chain just hours after it went bust, has said it wants to “restore the right level of ongoing relationships” with its brands.
Owner Mike Ashley has also vowed to keep open the bulk of the 59 House of Fraser stores.
Sports Direct already held an 11% stake in the group, which had been intending to close 31 shops under a now-abandoned restructuring plan.