Baugur has hoisted a for sale sign over its MK One value fashion chain.

The Icelandic investor has appointed accountant Deloitte to oversee the disposal.

It is understood that Baugur felt the struggling value fashion chain, which went in to the red to the tune of £17.4 million last year, did not fit in with its portfolio of brands and its focus on overseas expansion.

Speculation has surrounded the future of the ailing chain, which Baugur acquired in 2004 for £55 million. Sales fell to £118 million in the year to January 27 from £131.7 million for the previous 17 months.

Deloitte is believed to have been involved with the process for some time and that Baugur has received some interest already. Baugur is looking for a sale of the entire business as a going concern.

The value sector has continued to bear the brunt of the downturn and increased competition from the likes of Primark, Peacocks and the supermarket. Value peer Ethel Austin went in to administration today.

The sale follows the announcement that Baugur has amassed a war chest of £430 million for new investments after divesting all but its retail portfolio.