House of Fraser has tumbled into administration after last ditch talks to save the business collapsed.
The department store business said discussions with potential bidders, investors and creditors had “not concluded in a solvent solution”.
The move has left 17,500 jobs, including 11,500 concession staff, hanging in the balance.
As previously reported, Edinburgh Woollen Mill owner Philip Day, Sports Direct tycoon Mike Ashley and restructuring experts Alteri had all been in discussions to try and rescue the business after Hamley’s owner C.Banner pulled the plug on plans to take a controlling stake in the chain and invest £70m into its turnaround strategy.
House of Fraser urgently needed a cash injection ahead of August 20, when it is due to pay its concession partners. It also faces a hefty rent bill at the end of September.
However it has been unable to secure the funds required and has drafted in Ernst & Young to handle the administration process.
House of Fraser’s 59 stores are poised to open as normal today – including the 31 that had been earmarked for closure as part of its CVA plan – as Ernst & Young attempts to find a buyer.
According to Sky News, Ashley remains in discussions and could buy the embattled business in a pre-pack deal.
The retailer said in a statement: “Significant progress has been made towards completing a sale of the group’s business and assets.
“The proposed administrators are expected to continue to progress those discussions with a view to concluding a transaction shortly after their appointment.”
House of Fraser boss Alex Williamson added: “We are hopeful that the current negotiations will shortly be concluded. An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength.
“In the two weeks since the Cenbest and C.Banner transaction ceased, the directors have brought forward a number of potential buyers and the group’s financial advisers have run a comprehensive M&A process to identify and then develop other third-party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace.”
The chain’s chairman Frank Slevin described the last six months as “an extraordinarily challenging” period for the business.
But insisted that House of Fraser had delivered on “critical elements” of its turnaround plan and said he was “confident” the retailer was “close to securing its future”.