McPherson had promised to restore the value clothing chain to its “former glory” after snapping-up the business out of administration in 2008.
Administrators MCR have also placed Ethel Austin’s sister company, homewares chain Au Naturale, into administration, putting over 3,700 jobs at risk.
Sources close to the company say that McPherson’s efforts to turn the business around failed because it had proved difficult to secure working capital amid the recession.
“There is no doubt in our mind that the onset of the global economic crisis has hit the retail sector particularly hard,” said Geoff Bouchier, joint administrator at MCR.
As a consequence of this, the companies have struggled to secure funders, which in turn has impacted their ability to generate sales revenue.
McPherson, a Scottish entrepreneur, originally founded MK One, the women’s clothing retailer which she founded with Arcadia billionaire Sir Philip Green, before buying several clothing retailers out of administration, including maternity wear chain Blooming Marvellous.
While the stores will continue to trade for now, MCR said it couldn’t guarantee it would find a buyer.