A spokeswoman for Ernst & Young said: 'We are in discussions with management about the options.' The group is understood to have held talks with its banker HBOS and Ernst & Young late last night.
At the start of the week, the troubled retailer stopped taking orders online, only accepting cash payments in stores. A week ago, Fopp shut all of its stores for an extraordinary stocktake. At the time, chairman and major shareholder Gordon Montgomery admitted that sales had been falling, but denied the chain was going into administration.
Fopp trades from 50 stores and it is thought that its move in February to buy 67 stores from failed retailer Music Zone, as well as rising interest rates, has put financial pressure on the company.
In its accounts for the year to April 2006, Fopp posted a£184,000 profit on sales of£40 million. It made a loss the previous year.