Some 400 jobs are in the balance as administrators for Mothercare Australia hold talks with interested parties over the possible sale of the maternity and childrenswear retailer.
The company has gone into administration after an agreement to sell the business to the Myer family for about $6 million fell through.
Myer Family Company Holdings pulled out because some conditions were not fulfilled or waived.
Mothercare has appointed Brian Silvia and Antony Resnick of BRI Ferrier as administrators.
A spokesman for BRI Ferrier said that talks had commenced with parties interested in buying Mothercare, and they would also continue to seek expressions of interest.
"The administrators are seeking to sell the business as a going concern in whole or in part, for example on a regional basis," he said.
The administrators are also continuing to assess the financial viability of the individual stores and across the group, which they expect to complete in the next few days.
The company is the latest in a long line of retailers to run into difficulty, including Colorado, Borders, Ojay and Australian Convenience Food Group, due to tough trading conditions due to weak consumer demand and price wars with rivals.
The Mothercare group has 43 stores nationally across the Mothercare, Early Learning Centre and Kids Central brands and has about 400 employees.
The stores will continue to trade while the financial assessment is conducted.
As part of the proposed sale, Myer had agreed to provide $500,000 to Mothercare for use as short-term working capital, after the retailer earlier said it would need to raise capital to maintain its Australian operations.
During the due diligence phase in December, Mothercare flagged that the deal may not go ahead.
Mothercare increased its revenues for 2011/12 by 21 per cent but recorded an underlying pre-tax loss of $10.9 million.
It said the loss was a result of restructuring and redundancy costs, an asset writedown and costs relating to the return of stock to suppliers.