Mosaic, the parent company of such brands as  Karen Millen and Coast — in which the troubled Icelandic investment firm Baugur Group holds a minority stake — could be close to administration. London’s Sunday Times reported that the group will enter a pre-pack administration process, whereby the Icelandic bank Kaupthing — the company’s senior creditor — will together with the company’s chief executive, Derek Lovelock, immediately buy back Mosaic’s Karen Millen, Coast, Oasis and Warehouse businesses. Principles, a midmarket clothing brand, and Shoe Studio Group, Mosaic’s chain of fashion footwear retailers, would be sold separately, according to the reports. A spokesman for Mosaic declined to comment Sunday. On Friday, Peter Davies, a former chief executive officer of Principles, issued a statement saying he had made a formal offer to reacquire the label, though the Mosaic spokesman said that Davies is not in exclusive discussions with Mosaic over the sale. According to the report, the British department store Debenhams is also bidding for Principles, which operates concessions in its stores.

This story first appeared in the March 2, 2009 issue of WWD. Subscribe Today.