Thousands of UK shop workers – scores of them in Staffordshire and the Black Country – today faced the prospect of losing their jobs in the collapse of budget fashion chain Peacocks.

The administration of Peacocks is one of the biggest since administrators were appointed to Woolworths in December 2008, leading to a wave of closures which left 27,000 employees out of work. Administrators from accountants KPMG were called in last night to run the ailing business.

Peacocks is still thought to be profitable but is weighed down by hundreds of millions of pounds of debts.

Prospects are better for its sister company, Bonmarche. Although it has filed a notice of intent to appoint administrators in the next fortnight, chances are thought to be good that the business will be sold before then.

It would secure the future of Bonmarche’s 3,800 staff at 394 stores. But prospects are grimmer for Peacocks, which employs 9,600 staff and owns 611 stores and 49 concessions across the UK.

Even if a buyer can be found, it is likely that a new owner will slash the stores estate and make hundreds of staff redundant.

In the meantime, however, KPMG said all Peacocks stores remain open as it seeks to find a buyer for the business and no redundancies have been made.

It has branches in the Wulfrun Centre in Wolverhampton, Bilston, Bentley Bridge, Rugeley, Stafford and a concession at Stafford’s Co-op store, as well as Wednesbury, Cape Hill, Smethwick, West Bromwich, Merry Hill, Brierley Hill, Stourbridge, Dudley and Halesowen.

Chris Laverty, from KPMG, said a combination of the spending slowdown on the high street, too many stores and high overheads “led to the business becoming financially unviable in its current form”.

By Simon Penfold