Pakistani billionaire Alshair Fiyaz is bidding for bankrupt Peacocks Stores Ltd, after the UK-based fashion chain last month collapsed with debts of around £750 million.

London-based Sunday Times yesterday reported, with citing sources that Fiyaz is working with Peacocks management along with Danish investment fund Solstra Capital, to table an offer when final-round bids are due today.

The report said that some private equity firms have lost interest in bidding for Peacocks, but an unidentified Indian clothing manufacturer may also bid for the 128 year-old fashion store chain.

Alshair Fiyaz made his fortune in the textile industry and his principal interests now are in shipping and financial services.  In 2009, he acquired the Magasin Du Nord chain, known as Denmark's Harrods, and later leased it to Britain's second-largest retail chain Debenhams department store.

Solstra had earlier completed the Magasin Du Nord acquisition on behalf of Fiyaz, founder of financial services business ALFI Innvestments.

With 611 branded stores across the UK, Scotland, Ireland and Wales, Peacocks last month went into administration with around £750 million of debt after lenders, led by Royal Bank of Scotland refused to inject more money.

Peacocks is the biggest retail collapse in the UK after the fall of the century old high street icon Woolworths in 2008.

Placing a company into administration in the UK is akin to filing for bankruptcy protection in the US. Administrators try to salvage as much of the company as possible for the benefit of its creditors. Administrators can try to keep the business as a going concern or breaking it up and selling it off.

Founded in 1884 in Warrington, Cheshire, as Peacocks Penny Bazaar by Albert Frank Peacock, the business grew under his son Harold, who moved the company to its current base in Cardiff.

Peacocks was listed on the London Stock Exchange in 1999, and went on to acquire retailer Bonmarche in 2002, which is one of the UK's largest women's-only retail chain and sells low-cost clothing in a wide range of sizes to women over 45 years old.

Peacocks was taken private in 2006 by hedge funds Och-Ziff and Perry Capital, who expanded the chain to more than 500 stores by 2008.

Last month private equity firm Sun European Partners, which also owns the Alexon and Jacques Vert brands, acquired all Bonmarche stores except for three, for a reported £10 million.

The PE firm closed 160 stores that led to 1,400 job losses, but said that it will continue to operate 230 stores along with 2,400 employees.

Administrators KPMG have kept all the Peacocks stores open until they find a buyer, but last week eliminated 249 staff at Peacocks head office in Cardiff.

The UK may not have declared an official recession, but its retail sector is in recession, as new figures reveal that 183 retailers went into administration last year, an increase of 10 per cent on 2010.

Tesco, UK's biggest supermarket chain, delivered its worst British Christmas sales performance in decades, while Marks & Spencer, with more than 21 million customers, posted a 1.5-per cent decline in clothing and homeware sales in the 13 weeks to 31 December 2011.

Argos, Mothercare, Halfords and Thorntons reported sales declines over the crucial Christmas holiday season as Britons reined in spending after a difficult year for many families.

Most supermarkets across Europe have reported bleak sales during the festive season, which account for nearly 20 per cent of their yearly revenues.

French supermarket giant Carrefour last month issued a profit warning and said that 2011 profit would plunge by up to 20 per cent, while UK's kidswear chain Pumpkin Patch and Blacks Leisure, the outdoor retailer went into administration last month.