German home shopping retailer Quelle is set to close with the loss of up to 7,000 jobs.

According to reports Quelle, part of collapsed German retail giant Arcandor, has failed to find a suitable buyer leading to the closure of the 82-year old company.

German mail order rival Otto, which operates the Freemans Grattan Holdings in the UK, had been tipped as a potential buyer of the business.

Arcandor, which also owns department store chain Karstadt, filed for bankruptcy protection in June. The future of Karstadt remains unclear as hopes of a merger with German retailer Metro were quashed last week when Metro said it did not need to tie up with Karstadt, according to reports.