Fashion retailer Capo is likely to be sold to a management buy-out team led by chief executive Mike Abrams within the next couple of weeks, according to sources close to the deal.
Victory Corporation, which owns the fashion chain, confirmed last week that it was in advanced negotiations to sell Capo.
According to Victory, the 'non-core' business had continued to experience difficult trading conditions and margins had been eroded.
Capo's trading losses and the potential sale will mean a total of£2.9 million in losses for Victory, which along with supply chain restructuring costs for the group's cosmetics division, led Victory to announce a profit warning last week.
The 18-store Capo business, formerly Capolita Roma, was bought by Victory in 1999, helping it secure outlets for its Virgin Clothing range. Abrams has been pursuing a management buy-out option for the past three years.
Abrams founded Capolita Roma in 1982, but sold the parent company Cadoro to Victory for£600,000.