The owner of clothing chains Peacocks and Bonmarche has said it plans to place both businesses into administration.
The Peacock Group, which employs a combined 11,000 staff, said it made the decision after discussions with lenders over the future of the group broke down.
The parent company said it would seek a potential buyer for the Bonmarche business, which includes some 394 stores, but will appoint an administrator in the meantime.
A statement from The Peacock Group said it had been reviewing the future of the Bonmarche chain and its role within the group and decided to sell the business.
The group has entered "exclusive talks" with a potential buyer but said that to "protect" the business while the sale process completes, it had filed an intention to appoint administrators.
Meanwhile, the wider group, which includes the larger Peacocks chain, said it would also appoint administrators after it failed to reach an agreement with its banks, which include Royal Bank of Scotland and Barclays.
The Cardiff-based retailer reportedly failed to persuade the banks to enter a debt for equity deal.
Barclays and RBS both said they had been supportive throughout the discussions.
Peacocks, owned by hedge funds Och-Ziff and Perry Capital, has been boosted by the success of a collaboration with the singer-turned-fashion designer Pearl Lowe. Like-for-like sales rose 17% over the Christmas period and the company said it was benefiting from its ability to react quickly to fashion trends.
The exact amount of the debt within the business remained unclear but £647 million of borrowings was reported to be within the business at the end of April 2010.