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Whittard of Chelsea on brink of collapse

LONDON - Whittard of Chelsea, the 122-year-old speciality tea and coffee retailer, is reportedly holding last-second talks with potential buyers to avoid entering administration.

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The company, owned by Icelandic investment firm Baugur, has lined up accountancy firm Ernst & Young to act as administrator while talks between potential buyers were continuing last night, although the future for Whittard's 130 retail shops looks increasingly dark.

If the company were sold, it could go into pre-pack administration, where the firm goes into the hands of the accountants but is then bought out again so it can continue trading. This option would still put hundreds of jobs at risk.

Baugur, which purchased Whittard for £21.5m in 2005, also owns a number of other high street chains, including Karen Millen and Oasis.

Icelandic bank Landsbanki, which backed Whittard, reportedly cut off funding to the retailer this week.

Despite a late Christmas shopping rush, hundreds of other high street retailers face similar fates in the new year as the recession deepens.

Rumours are swirling around entertainment chain Zavvi, the former Virgin Megastores, which was hurt by the collapse of Entertainment UK.

Long established chain Woolworth's was the first to fold to economic pressure and will no longer trading after January 5th.

This week many of the retailer's stores were selling off fixtures, everything including the wire shopping baskets, displays, safes, ladders, mops buckets and office supplies.

Woolworth stores that sell £3,000 worth of fixtures will receive a £200 bonus to split between staff, with an extra £200 going to managers.

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