Adams calls in administrators

The 75-year-old company - which makes clothes for Boots and has its own brand Adams kids stores - filed a notice of its intention to appoint PricewaterhouseCoopers as administrators on Christmas Eve.

Adams' woes come hard on the heels of the collapse of tea and coffee merchant, Whittard of Chelsea, music chain Zavvi and menswear retailer The Officers Club, which all fell into administration in the days before Christmas. Both The Officers Club and Whittard were subsequently sold.

Adams has around 260 stores among its 500 distribution outlets in the UK and is understood to employ around 2,000 people. It also has more than 100 international outlets in the Middle East and Europe.

Adams produces the Mini Mode range for Boots, which is sold in store as well as through its own website. The company is owned by Northern Ireland businessman John Shannon, who bought it out of administration in February last year, closing 42 of its shops.

Mr Shannon - a former chairman of footwear firm Stead & Simpson and clothing chain Country Casuals - has driven the company towards affordable kids fashion and launched its "kids love fashion" branding.

Adams - which sells babywear, school uniforms and clothes for children from two to 10 years - had appeared to be beginning to show signs of improvement under Mr Shannon. The company posted a 25% increase in like-for-like sales in both boys and girls fashion ranges in spring this year. But a sharp deterioration in trading, combined with competition from supermarket chains have reportedly hit its ability to service its debts.

According to the Sunday Times, pressure from creditors in recent weeks pushed the company over the edge. Adams is reported to owe £10 million to Burdale, an arm of the Bank of Ireland, and just over £20 million to Mr Shannon.

A spokeswoman for PWC said it was not certain when the firm would be formally appointed as administrators for the business. "They put the thing into court on Christmas Eve but I cannot really say much more than that," she said.

Chains across the high street slashed prices in the Christmas season in a bid to tempt shoppers squeezed by the credit crunch, but analysts believe it is unlikely this will be enough to salvage the beleaguered sector. Insolvency experts Begbies Traynor have predicted that as many as 15 national retail chains could go bust by mid-January.