Retail entrepreneur John Kinnaird was finalising a pre-pack administration deal to buy Faith as Drapers went to press.
Kinnaird, who was expected to take a 51% stake in the company, was believed to be planning a revamp of the footwear chain which would see it move back into a lower-priced territory competing with the likes of Barratts, River Island and New Look.
Faith had recently stepped upmarket to target a slightly older and more premium consumer, which helped drive some improvement in trading.
Kinnaird is also expected to slash head office costs by merging Faith with his branded menswear chain Envy and young fashion brand Chilli Red, which is owned by Kinnaird’s investment partner Agilo.
A source close to the situation told Drapers: “There is potential to have one head office, one distribution centre, one web team and so on. There is likely to be job losses at the business.”
Faith’s management team, led by chairman Steve Cotter, managing director Steve Swaby and finance director Lindsay Dunsmuir, were expected to step down from the business as Drapers went to press.
Faith’s bank Barclays, which put the business on the market last month after rejecting a debt for equity deal from Faith’s private equity owner Bridgepoint, is understood to have rolled over some of its debt in the chain and taken an equity stake as part of Kinnaird’s deal.
One footwear retailer said: “Competing with Barratts and River Island is not going to be easy.” He added: “Suppliers are nervous. A lot of them have retention of title on goods but overseas factories aren’t going to come to the UK and collect their stock from the shops, so John will likely strike some deals on short-term supply of goods.”