Baugur has filed for bankruptcy after an Icelandic court refused to grant its application to extend its protection from creditors.

Baugur group chairman Kristin Johannesdottir said yesterday's ruling was a “disappointment”.

He said: “We believe that the company fulfils all the conditions for the extension and that the restructuring plan was viable. However, following the ruling, we have no choice but to file for bankruptcy.”

Baugur’s bankruptcy ends the Icelandic investment group’s prolific spending spree on the UK high street. Over a period of nearly ten years, the group snapped up stakes in brands including House of Fraser, Hamleys, Iceland and the now-defunct Mosaic.

The group hit the buffers in the wake of the Icelandic banking collapse in October and after building up debt as it expanded.

Baugur entered the moratorium period last month after its UK arm, BG Holding, was forced into administration by creditor Landsbanki, as revealed by Retail Week. BG Holding comprises Baugur’s stakes in Hamleys, House of Fraser, Iceland and jewellery group Aurum.

The future of the ownership of Baugur’s stakes in its remaining retail businesses remains unclear. Remaining creditors include nationalised Icelandic banks Glitnir and Kaupthing, which control Baugur’s stakes in retailers including All Saints, Jane Norman and Whistles. Management at some retailers are understood to be exploring debt-for-equity swaps or management buyouts.

Johannesdottir added: “The management and employees of Baugur have been working hard to save the company’s assets in co-operation with its creditors since the collapse of the Icelandic banking system in October 2008. The board of directors of Baugur Group would like to express gratitude to the employees and everyone else the company has had the pleasure of working with in recent years.“