The UK's biggest outdoor retailer, Blacks Leisure, put itself up for sale today in a last-ditch effort to save the loss-making business from collapse.
Blacks, which owns 98 Blacks outlets and 208 Millets stores, warned that any sale of the company or its brands, which also include Peter Storm and Eurohike, was unlikely to offer value to shareholders as its £36 million debt far exceeds its market value of £3.2 million.
The group, which made a £16 million loss in the first half of the year and recently warned that its full-year performance would be worse than expected, has been hit by low consumer confidence and squeezed household budgets.
The directors had hoped to secure funding for a turnaround of the business, which would have included a revamp of its stores, but its shareholders, which include Newcastle United owner Mike Ashley's Sports Direct, failed to put up the cash required.
Shares in Blacks fell another 50% today, reducing the company's value to just £1.3 million. The stock has tumbled more than 95% since the start of the year.
Sports Direct is understood to have proposed a joint venture with Blacks to merge its warehousing and IT operations, which would help raise the fundingBlacks requires for its strategic overhaul through cost savings.
But today's announcement suggests any such offer has been turned down.
Mr Ashley's company, the largest shareholder with a 21% stake, launched a failed takeover bid for Blacks in 2010 and turned down an equity raising in April.
Some retail analysts believed Sports Direct, which has challenged Blacks in recent months with its discount outdoor brands Karrimor and Field & Trek, will only purchase the business or its brands through administration if it becomes insolvent.
Nick Bubb, retailing analyst at Arden Partners, said: "The problem with Blacks has always been that its core Blacks chain is not unattractive, but the Millets chain is a millstone around their neck.
"All eyes will now turn to see what Sports Direct will do, but their strategy will probably to pick up what they want from the receiver in January."
Blacks said it would complete the sales process through professional services firm KPMG and hopes to have found a buyer by January.
Blacks was hit by the warm weather in October and November as much of its clothing is aimed at harsher conditions, such as fleeces and waterproof jackets.
Clothing retailers, including Top Shop owner Arcadia and department store John Lewis, have all flagged the record temperatures over the autumn as an obstacle to sales growth in the crucial run up to Christmas.
The unseasonal weather added to the general malaise in the retail sector, which has seen a raft of companies issuing profit warnings and announcing store closures.
Mr Bubb added: "Poor old Blacks has simply bowed to the inevitable and admitted that it is impossible to get funding, with their share price so low and their prospects so bleak."