Thousands of jobs are hanging in the balance as the owner of clothing chains Peacocks and Bonmarche said it plans to place both businesses into administration.
The Peacock Group employs 11,000 staff and said the decision was made after talks with lenders over the future of the group broke down.
A potential buyer is being sought for the 394 Bonmarche stores but an administrator will be appointed in the meantime.
Peacocks has been boosted by the success of a collaboration with the singer-turned-fashion designer Pearl Lowe.
Like-for-like sales rose 17 per cent over the Christmas period and the company said it was benefiting from its ability to react quickly to fashion trends.
The exact amount of the debt within the business remained unclear but £647 million of borrowings was reported to be within the business at the end of April 2010.
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