Transline Group, which staffs Sports Direct’s largest warehouse – Shirebrook – has filed a notice of intention to appoint administrators.
According to Sky News, the employment agency is on the verge of collapse after failing to find new investment.
The group, which came under fire from MPs when Sports Direct’s warehouse practices were investigated last year, reportedly filed a notice of its intention to appoint administrators last week.
The company now has just a few days to raise the cash it needs to keep it afloat, or face the threat of collapse.
Deloitte is believed to have been lined up to handle the administration.
In a statement issued to Sky, a Transline spokesman said: “The company has suffered as a result of a continued move to tighter margins in the recruitment industry.
“We are close to securing inward investment that will allow us to drive forward with continued growth and infrastructure development, and have lodged the Notice of Intention to protect the business, our employees and our customers as we complete this process.
“The welfare of our staff and our relationships with our customers are of paramount importance, and we are continuing our service and operations as normal.”
It receives around £20m a year to supply workers to Sports Direct’s warehouses, despite MPs urging the retailer to cut ties with the agency last September.
The Mike Ashley-owned retailer recently appointed a workers’ representative to its board in an attempt to improve the company’s image.