Private equity firm MSD Capital has teamed up with Goode Partners to enter exclusive talks to buy struggling fashion chain All Saints.

A deal could be finalised by the end of the week according to Sky News.

Time is running out for All Saints. Its biggest lender Lloyds Banking Group has given the retailer until the end of this week to secure new funding. The bank has appointed KPMG to advise on its options should a buyer not emerge in the next week.

The retailer was close to being bought by M1 Group, a Beirut-based business co-founded by the likely next Lebanese Prime Minister, but the deal fell through at the eleventh hour last week.

Kaupthing, the now defunct Icelandic bank which owns a significant stake in All Saints, is expected to pump more cash into the business if a deal is not finalised imminently.

It originally agreed to offload its shares in the business but is understood to be prepared to hold on to them if the need arises. “Kaupthing would never let the business go into administration,” said one well-placed person.