The Sunday Times said yesterday that Gray had provisionally agreed a refinancing deal with a consortium of investors including Credit Suisse, Eos Partners and ABN Amro, which bought the business in 2004. However the newspaper added that the chain could still face administration.
Rumours of poor trading have dogged the Ethel Austin chain since 2006. The company completed a debt for equity exchange to release some of its debt burden last year. Debts levels went down from £57m to £20m but trade is understood to have continued to be difficult despite the retailer repositioning from its value roots to become a more fashion-led chain.
Gray, who has close links with Sir Philip Green, is a well respected operator in the value market. She grew the MK One business to sales of £139m and EBITDA of £14.8m in 2004, before selling the chain for £44m to Baugur.