BLACKS Leisure is in danger of falling into administration and being broken up if it fails to find a buyer this week, putting 2,000 jobs at risk, it was claimed yesterday.

The stricken firm, which owns 98 Blacks outlets and 208 Millets stores, suffered a major blow to its survival hopes this week when its biggest shareholder Sports Direct walked away from buy-out talks.

Blacks, which put itself up for sale earlier in the month in a bid to stave off collapse amid dire trading, now faces a desperate scramble to find a buyer by its deadline on Thursday.

If it is unsuccessful, the company could go into administration after Christmas and carry out a company voluntary arrangement, which would allow it to write off some of its £36 million debt pile and let buyers close unwanted stores, sources told the Sunday Times.

The newspaper said Blacks’ rivals Mountain Warehouse, Cotswolds and Go Outdoors are expected to bid for the best stores, leaving 100 outlets and 2,000 staff at risk.

Meanwhile, the Sunday Telegraph reported that restructuring specialist Hilco, which in July sold the remnants of Habitat to Home Retail Group, is thought to be interested in buying the trading business out of administration.

The newspaper understands that accountancy firm KPMG, which was brought in to handle a sale, is talking to a number of potential buyers, some of whom are interested in buying the whole company, while others are interested in either the Blacks or Millets brands, or “a handful” of its shops.

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.

The retailer, which owns the Peter Storm and Eurohike brands, 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. Its share price has tumbled more than 95% since the start of the year.

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.

As Blacks’ biggest shareholder, Newcastle United owner Mike Ashley’s 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.