Blacks Leisure's hopes of staving off collapse were dealt a blow when its biggest shareholder Sports Direct withdrew its interest in buying the UK's biggest outdoor retailer.
The stricken firm, which owns 98 Blacks outlets, 208 Millets stores and the Peter Storm and Eurohike brands, put itself up for sale earlier this month as it struggles under a £36 million debt pile amid dire trading.
Newcastle United owner Mike Ashley's Sports Direct chain, which owns 22.5% of Blacks, had said it was among the interested parties but has now ruled itself out.
As Blacks' biggest shareholder, Sports Direct had been seen as the most likely to step in to rescue the ailing retailer, having already tried to buy the company last year.
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.
However, Blacks said earlier this week that Sports Direct was one of a number interested parties, so there is still some hope of a rescue from elsewhere.
Blacks put itself up for sale after failing to secure extra funding to turn around the business, which would have included a revamp of its stores.
It admitted it was unlikely to offer value to shareholders as its debts far exceed its market value of £1.9 million. The stock has tumbled more than 95% since the start of the year.
Blacks 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. It 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.
Figures from the Office for National Statistics released on Thursday revealed a 0.4% fall in sales volumes in November, heaping more pressure on the high street which is already being pummelled by the squeeze in spending.