All Saints is understood to be finalising the terms of a potential £50m rescue deal to secure its long-term future.
The retailer, which could reveal fresh investment as early as today, is thought to be holding advanced negotiations with three potential investors, including US investment specialist Och Ziff and Goode Partners, according to reports.
Accountancy firm Ernst & Young is leading the talks. Och Ziff has a history of investing in UK retailers, including Peacocks.
Several other investors have looked at All Saints, including Advent International and Oaktree Capital, but withdrew from the process.
Ernst & Young was hired to find investment after the collapsed banks Kaupthing and Glitnir decided to sell their shareholdings in the retailer. Lloyds Banking Group provides All Saints with its working capital facility.
All Saints’ third-biggest shareholder is Kevin Stanford. He is understood to have a special class of share, which is held in trust, and would be expected to convert into a majority stake if a deal were done. He would then hold a little more than 50% of the shares with the rest owned by the new investors.
In the year to January 31, 2010, All Saints more than doubled pre-tax profits to £10.7m, on sales up 46% to £132.9m.