Bonmarche, the fashion chain which was part of collapsed retailer Peacocks Group, has been sold in a deal that will lead to 1,400 job losses and 160 store closures.
Private equity firm Sun European Partners, which also owns the Alexon and Jacques Vert brands, has bought the women's clothing retailer out of administration in a so-called pre-pack deal for a sum reported to be £10m.
Sun, which bought the entire chain apart from three stores, has said it will continue to run 230 stores but will close about 160.
The store closures mean it will continue to employ about 2,400 of the chain's 3,800 strong workforce.
The staff in stores set for the axe were told yesterday and the outlets are expected to shut in the near future. The company said it was too early to release a list of sites to be closed.
Bonmarche, founded in 1982, was part of the Peacocks Group, which last week collapsed under its £750m debt mountain in the biggest retail failure since Woolworths, placing 9,600 jobs in jeopardy. But Bonmarche was kept out of administration to allow sale talks to continue.
Pre-pack deals, where a chain is placed into administration and immediately bought in a previously-arranged deal, are controversial because they allow the new buyers to take on the chain but write off many of its debts.
The deal means the Bonmarche name will survive on the high street. The chain is one of the UK's largest women's-only value retailers and sells affordable clothing in a wide range of sizes to women over 45 years old.
Chris Laverty, joint administrator at KPMG, said: "Given the hostile conditions on the high street, we're pleased to have concluded a sale with Sun European Partners. The deal is a positive step forward in underscoring Bonmarche's future."
Sun, which is ultimately based in the US, will also take on Bonmarche's head office in Wakefield, West Yorkshire.
Its vice president, Matthias Gundlach, said it was working with current management to put "a sustainable growth programme" in place.
He added: "Bonmarche is a great brand that operates in an attractive niche of the apparel sector that we know very well.
"Thanks to its strong range with a good value for money proposition and a unique in-store service experience, Bonmarche has a loyal customer base of regular repeat buyers."
Before Sun bought the chain stores in Balham and St Albans were closed with the loss of 12 jobs. A third store in Perth, which is "not commercially viable", has not been included in the deal and the administrators expect to wind the store down, resulting in seven redundancies.
The sale of Bonmarche will free up administrators to look for a buyer for the Peacocks chain, which has 563 stores and 48 concessions.
It is understood numerous private equity firms including Sun and clothing firm Edinburgh Woollen Mill are interested in buying the chain, while Tesco is reported to be interested in some stores. A total of 50 firms have registered an interest.
The administrators, who have kept the stores open while they seek a buyer, last week made 249 staff at its head office in Cardiff redundant - nearly half the workforce.