Jaeger has filed a notice of intention to appoint administrators in an effort to ward off potential action from creditors.
The embattled fashion chain, which has been put up for sale by owners Better Capital, filed the notice on April 5.
The move leaves the future of its 25 stores and almost 700 staff hanging in the balance.
Better Capital, which has owned the business since 2012, revealed earlier this week that one of its funds has sold Jaeger’s debt instruments to an undisclosed buyer for £7m.
The sum represented what Better Capital called a “disappointing” £23m write down.
Retail Week understands that Edinburgh Woollen Mill remains in pole position to buy the retailer out of administration, should it acquire the fashion chain.
As previously reported, Edinburgh woollen Mill, owned by Philip Day, is likely to buy the chain out of administration and plans to shed most of Jaeger’s stores to shift the focus towards concessions and online.
Alix Partners, which has been advising Better Capital over the sale of the retailer, was named on the notice, but insisted it was not certain that Jaeger would fall into administration.
An Alix Partners spokeswoman said: “We can confirm that we have been named within the notice to appoint administrators. It is important to note that this does not mean the business is in administration, nor that we have been appointed.
“The business now has a 10-day period of protection in which to identify the best possible route forward.
“If a solution cannot be found at the end of that period then it is likely our appointment will take effect”.
Jaeger is the latest retailer to suffer amid turbulent trading conditions on the high street, as the rise of online, rising labour costs and the tumbling value of the pound following the Brexit vote all continue to bite.
Jones Bootmaker was rescued by Endless in a pre-pack administration deal last week, although its former stablemate Brantano collapsed into administration.
The value shoe retailer’s stores are now likely to be sold off in parcels, with footwear rival Shoe Zone thought to be among those eyeing its shops.
As revealed by Retail Week, 99p Stores tumbled into administration last month less than two years after it was acquired by value rival Poundland, while Store Twenty One is also thought to be in talks with lenders over its quarterly rent payments.