The former owner of Dolcis Shoes has stepped in to rescue Faith, the struggling footwear chain, securing more than 2,000 jobs.

John Kinnaird, who owns men's clothing company Envy, has teamed up with Agilo, an investment fund specialising in distressed companies. Agilo also owns Chilli Red, the fashion business aimed at teenage girls.

The partners plan to combine Faith, which has 85 stores and more than 120 concessions, with Envy and Chilli Red to create a business that would have about 140 stores and more than 200concessions in House of Fraser, Debenhams, and Galeries Lafayette, the French department store.

Faith, previously owned by Bridgepoint Capital, the private equity firm, was placed in administration yesterday before being sold on for an undisclosed sum. Bridgepoint Capital paid £64 million for Faith in 2004 and has since spent £15 million on the business. However, it was forced to put the business up for auction after failing to reach agreement with its bank, Barclays.

Barclays had taken control of the chain, which has 2,400 staff, several weeks ago after the lender refused a debt-for-equity swap proposal by Bridgepoint as well as a further £8 million of equity.

Specialist footwear stores have struggled to compete against clothing stores such as Zara and Hobbs, which are able to stock more shoes and are winning more customers.

Faith's most recent accounts reported operating losses after tax of £11million in the year to June 30 2007, on sales of £89 million.

FTI Consulting, the administrators, said: “This transaction will enable the business to continue to trade as well as securing the future of the brand.”

Mr Kinnaird and the management now hold a majority stake in the business, with Barclays and Agilo, which was set up only last year and boasts Michael Portillo, the former Conservative Defence Secretary, holding minority shares and also providing working capital facilities.

Mr Kinnaird's previous foray into footwear retailing ended last year when Dolcis Shoes went into administration. Mr Kinnaird had bought the company with Epic, the private equity firm, for £2.7 million in December 2006 but a year later Epic pulled out.

He was also previously retail director at Sports Division, once owned by Sir Tom Hunter before its sale to JJB.

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