Around 2,500 jobs are under threat at budget clothing chain MK One after the group was put into administration.
Deloitte & Touche was appointed as administrator of the 172-store chain just weeks after it was sold by its former owner, Icelandic investment firm Baugur.
Retail restructuring specialist Hilco, which specialises in acquired under-performing business and turning them around, snapped up the troubled group at the beginning of the month for an undisclosed sum.
MK One, which sells budget clothing for women, girls and teenagers, has been loss-making, although Baugur said it decided to offload the firm as it “no longer fitted into the portfolio”.
Lee Manning, partner in Deloitte’s reorganisation services practice, said: “We are continuing to trade the business as a going concern whilst seeking a buyer.
“MK One has a strong customer base, a range of good brands and an excellent store portfolio.”
Based in north London, MK One employs around 2,500 UK staff.
It was previously majority owned by Baugur, which held a 60% stake, with other major shareholders including Icelandic bank Landsbanki, Barclays and the retailer’s management.
The chain was sold following an overhaul of Baugur’s portfolio.
Baugur said it was looking to concentrate solely on retail investments with the biggest growth potential.
News of MK One going into administration comes just a month after fellow discount fashion group Ethel Austin was also put into administration.
Liverpool-headquartered Ethel Austin was bought out of administration on Monday by former MK One boss Elaine McPherson.
It is thought that Ms McPherson had been among those firms bidding to buy MK One from Baugur.
Discount stores such as Ethel Austin and MK One have been struggling amid tough high street trading conditions and competition from rival budget chains such as Primark and Matalan, as well as the big supermarkets.
Around 2,500 jobs were saved at Ethel Austin when it was bought out of administration, but it had already seen more than 450 jobs axed and 33 stores closed by administrators.