Maplin in 48-hour race to secure rescue deal with Jaeger owner

One of the UK's biggest electrical goods chains is locked in a 48-hour battle to avoid administration amid an impasse over the terms of a rescue deal with its potential buyer.

Sky News understands that Maplin, which employs about 2,500 people and trades from hundreds of shops, is targeting an injection of new capital by the end of the month amid what sources close to it described as "cashflow issues".

However, talks with Edinburgh Woollen Mill (EWM), the high street empire owned by the tycoon Philip Day, are said to be progressing more slowly than either side would like because they have yet to reach agreement on the ongoing involvement of Maplin's current owner.

EWM is understood to be keen for Rutland to retain a stake in a new company that would be established to take ownership of the electricals retailer.

One source close to the talks suggested that Rutland "must be willing to play a role in the future of the company" in order for a deal to be struck.

Maplin is said to be seeking tens of millions of pounds to keep it afloat, with a number of substantial liabilities falling due in the coming days.

One person close to Rutland indicated that the fund remained "open-minded" about participating in a deal, which could be structured as a pre-pack administration.

If Maplin is unable to seal a rescue package, it would add to the gloom enveloping the British high street, with Toys R Us UK expected to appoint administrators on Tuesday morning.

It was unclear whether any other parties besides EWM were in talks about a deal to preserve Maplin's future.

The urgent talks aimed at finding new backers for Maplin follow the withdrawal of credit insurance to some of the chain's suppliers last autumn.

Sales during the crucial Christmas period plunged by 7% on a like-for-like basis, partly as a result of stock shortages triggered by the loss of suppliers' insurance.

Maplin and EWM both declined to comment on the progress of their talks.

Last week, a Maplin spokesman said: "We are in advanced talks with a number of parties and expect to be in a position to announce a solvent sale of the business within days.

"Once secured this will stabilise the business to the benefit of all stakeholders and provide Maplin with the financial firepower to deliver its 2020 multichannel strategy focused on smart tech."

The emergence of EWM as a possible buyer of Maplin last week surprised the retail sector, given its focus on high street clothing brands.

Under Mr Day the group has become one of the biggest employers on British high street, sweeping up brands including Austin Reed, Jaeger, Jane Norman and Peacocks.

It now operates more than 1,100 stores and concessions in the UK, and employs 24,000 people around the world.

Mr Day has a long-standing connection to Rutland, having bought EWM from the private equity firm in 2002 for £68m.