Kidswear retailer Adams is poised to be relaunched on the high street after the brand name was bought out of administration by one of its suppliers.

Sharad Madan, the owner of supplier XTC, said he is in talks with landlords to negotiate leases to reopen 40 profitable Adams stores this autumn, after he bought the brand name earlier this month, two weeks after the 124-store chain closed down.

Adams fell into administration in February for the third time in two years after struggling to compete on price with the value operators and supermarkets.

Madan said that he would strip out costs from the business, previously owned by Pakistani group Habib Alvi, by negotiating favourable deals with landlords and suppliers and outsourcing functions such as distribution. In addition, Madan will source more heavily from his own supply company XTC, which has three factories in India and links with a further five across Asia.

Madan will act as chief executive and will begin recruiting for a retail director and a buying director.

He expects Adams to be in profit “within 12 to 18 months”. In the 10 months to November 31, pre-tax losses were £10.5m.