Tea and coffee retailer Whittard of Chelsea is on the brink of administration, although it is understood a buyer is still likely to be found for part of the business.

Administrator Ernst & Young has today been appointed to the Baugur-owned chain and is talking to interested parties.

It is understood that Whittard could be placed into pre-pack administration and a potential buyer pick up part of the business. Five potential buyers are believed to have been circling the business, including restructuring specialist Hilco and the Gordon Brothers. The remaining three are thought to be trade buyers.

Whittard was put up for sale by Baugur at the beginning of December. It is understood that the tough economic climate has taken its toll on Whittard and it has performed poorly for the past few months. It has 135 UK stores and 30 worldwide.