Blacks Leisure is planning a company voluntary arrangement in order to secure its future.
The rescue deal would result in the shedding of around 80 of its 400 stores that trade under the Blacks, Millets and Free Spirit brands, according to the Sunday Times.
The move, which would put 400 jobs at risk, comes days after Blacks appointed administrators to 11 of its loss-makings O’Neill boardwear shops.
KPMG has been lined up to lead the process, which will be a last-ditch attempt to turn the company round after it admitted last week that it faced “an uncertain future”.
Blacks revealed it had underperformed its six-month budget and that it was likely to breach its banking covenants. Its bank Lloyds has agreed to waive the covenant breach, but only if Blacks gets rid of its unprofitable stores by the end of October.
Focus DIY successfully agreed a CVA with its creditors in August, after sports retailer JJB achieved one earlier in the year.