The retail industry has reacted with a degree of optimism that the demise of Baugur could signal the end of months of uncertainty for its brands and ring in positive changes to the high street.

One fashion boss said he was confident there was a solid future for most of the Baugur brands because he believed many of them were “valuable businesses”. He commented that the news was not a surprise. “Landlords, banks and suppliers had discounted this news already,” he said.

Begbies Traynor partner Nick Hood said: “Today is potentially a catalyst to get the high street moving. There is no suggestion that Baugur brands are the weakest on the high street and many private equity boys may have been keeping the powder dry for just this.”

Retail consultancy Pragma director Monica Lewis said: “It’s just another savage indictment of the problems that have been caused by the over-leveraging and the financial shenanigans that has made some people some money but that have pulled down the whole system.”

Moira Benigson of adviser Moira Benigson Executive Search agreed: “What has happened is terrible but Baugur represents something very symbolic in what has gone wrong on the high street – greed. Why did they need so many brands?”

She added that the strong brands will continue to flourish in the future. “In these times, excellence and creativity rises to the top and weaker brands disappear, which is not such a bad thing. If the brands are good then they will be able to stand on their own feet.”

However, Verdict consulting director Neil Saunders said that credit insurers, which have already pulled cover from many retailers, would “almost certainly” be more cautious as the risks have gone up so they will be looking to minimise their exposure.

He added that Sir Philip Green was in a strong position if he was to get involved. “He’s a short bet for banks, he’s always delivered a return and is in a good position.”