New Look, the fashion chain owned by two private-equity companies Apax and Permira, is reportedly considering a £1.7bn stock-market flotation.

The retailer was founded in 1969 by Tom Singh, who retained a 22% stake when it was bought in 2004 by Apax and Permira for £700m.

The retailer has gained from the economic downturn as cash-strapped consumers look for value for money. Earlier this year, the group reported a 10% rise in annual earnings.

Two years ago New Look abandoned plans to go public after a proposed £2bn sale fell through when it was unable to agree a price with possible investors.

Since then, Apax and Permira have invested £400m into New Look, which is saddled with £1.1 billion of debt.

Investment banks Merrill Lynch, Goldman Sachs, Citigroup and Credit Suisse are thought to be in the running to handle the flotation.

Meanwhile, the retailer is looking for a new chairman with City experience to handle the listing as current chairman Phil Wrigley reportedly prepares to depart.