Whittard of Chelsea has been rescued by private equity group Epic in a pre-pack administration deal.

Ernst & Young was appointed as administrator to the Baugur-backed chain yesterday, as revealed by Retail Week.

The chain was placed into administration today and the business and its assets sold to Epic for an undisclosed sum as a going concern. All of the stores remain open.

As well as suffering in the poor economic climate, the retailer’s funding was cut following the collapse of Iceland's banking system and the nationalisation of Landsbanki, the Icelandic bank that funded the retailer.

Baugur acquired Whittard for£21.5 million three years ago.

The future of other Baugur-backed and Icelandic bank-funded retailers including House of Fraser, Mosaic, Jane Norman and Whistles is unclear while the Icelandic authorities evaluate their assets.

Joint administrator Angela Swarbrick said: “Whittard of Chelsea and Boaters Coffee Co have been experiencing trading difficulties because of uncertain economic conditions; this has unfortunately resulted in the companies being unable to trade outside of administration. Fortunately a deal was able to be done that sees the businesses of the companies able to continue to trade and the Whittard of Chelsea name, with its 122-year heritage, remain on the high street.”