DOLCIS, one of Britain’s biggest shoe chains, is understood to be in rescue talks with its lenders about an emergency financial restructuring.

The loss-making chain was bought last December by Scottish entrepreneur John Kinnaird with backing from Epic Private Equity in a £2.7m deal.

It is believed to have drafted in accountants from KPMG during the last few weeks to advise on a range of options for the business amid tough trading conditions on the high street.

City sources said possibilities included injecting fresh funds into the business from an outside investor or a refinancing. They admitted that administration was a possibility, but insisted it was regarded as a last resort.

The company has 65 high-street branches and 150 concessions, predominantly in Bay Trading and Envy stores.

The chain began life on a street barrow in 1863 when founder John Upson started selling shoes in Woolwich market.

Kinnaird recently unveiled a revamped store fit at the group’s new 2,200 sq ft shop in Glasgow’s Silverburn centre.

Earlier this year Kinnaird admitted the first year of trading since the buyout had seen “quite a big loss” and that Dolcis had yet to break into profit.

News of the rescue talks came as it emerged that Langholm Capital, the private-equity group, is considering a sale or refinancing of Elvi, the plus-size ladies’ fashion retailer.

The group is understood to have hired BDO Stoy Hayward to explore options for the business, which could involve a refinancing or teaming up with a new trade partner.

Sources claimed administration was not being considered.

It is thought that BDO has already received a number of offers for Elvi.

The company recently relaunched its website which has helped to boost flagging sales.

Langholm bought the business in October 2006 in a management buy-in and buy-out that was reported to be worth about £10m.

The chain has 25 of its own outlets and 57 concessions in major department stores.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive