Mosaic Fashions has told auditors KPMG that the business has three months to refinance the group, which runs the Karen Millen, Oasis and Principles chains.
In a statement filed at Companies House last week, the group said that its standstill agreement with its bank Kaupthing, which put its debt repayments on hold from January, will run out on May 31.
KPMG also filed a declaration which said there was uncertainties over the group’s ability to continue to operate as a going concern. The declaration added that the future of the group depended on the ongoing co-operation and financial support from Kaupthing.
Kaupthing originally agreed to waive loan repayment deadlines last November.
Mosaic Fashions has put its Shoe Studio Group business up for sale and is reported to have received interest in its Principles chain from potential bidders as it continues refinancing talks with Kaupthing. It has no plans to offload any of its other brands.
Icelandic bank Kaupthing, which was nationalised last year, was last week granted an extension to its period of protection from creditors for nine months until November 13, by the District Court of Reykjavik.