Aurum Holdings, the jewellery group backed by beleaguered Icelandic investor Baugur, has confirmed that it has appointed Ernst & Young to review the business and has distanced itself from the investor, which is on the brink of administration.

In a statement the retailer, which comprises Watches of Switzerland, Mappin & Webb and Goldsmiths, confirmed that it had drafted in the independent advisors to explore ways to bolster the business, as exclusively revealed by Retail Week.

Aurum chief executive Justin Stead said: “As part of the board's commitment to ensure we act in a very diligent manner, we have engaged Ernst & Young to review and look for opportunities to strengthen our overall business.”

Aurum chairman and Baugur shareholder Don McCarthy said the news that Baugur filed for protection from administration – as revealed by Retail Week yesterday – was “disappointing” but does not affect the group’s trading or banking position.

He said: "During these difficult times, it is important to clarify the independence of Aurum and to emphasise that Baugur is a shareholder and has no impact on the strength of the business, or its day to day operations.”

Stead added: "We have the full support from all our shareholders and our banking syndicate led by HBOS and Landsbanki. They are pleased with our 2008 positive like-for-like trading performance along with the achievement and delivery of many key objectives including reducing stock by£10m while vastly improving operating efficiencies across the entire business.”