LONDON (Reuters) - Blacks Leisure, the struggling outdoor goods retailer that put itself up for sale earlier this month, said the deals it was working on would leave its shares worthless.
The bleak update from Blacks two days before Christmas Day saw its shares tank 36 percent.
That gave the firm, saddled with 36 million pounds of debt, a nominal market value of just 0.94 million pounds.
The firm sells products such as walking boots, camping equipment and ski jackets from 306 Blacks Outdoor and Millets stores, employing about 3,500 staff.
It said several parties had submitted indicative offers to buy the whole or substantially all of its trade, assets and brands.
"Blacks Leisure continues to hold discussions with a number of selected parties with a view to concluding the sale process in January 2012," it said.
"Based on the level of indicative offers received, it is most unlikely that any value will be attributable to the ordinary shares."
Blacks added that it continues to be in talks with its lender, Bank of Scotland.
Sports Direct, the UK's No. 1 sporting goods retailer and Blacks' largest shareholder with an 22.5 percent stake, said last week it would not make an offer for the firm, which has issued a raft of profit warnings.
However, analysts reckon Sports Direct remains interested in parts of the group. They also see the privately owned Edinburgh Woollen Mill, Mountain Warehouse, Go Outdoors and Cotswold Outdoor as possible suitors.
Analysts said a pre-packaged administration of Blacks early in the new year is most likely. That would allow a buyer to jettison unprofitable stores and overheads.
Britons' disposable incomes are being squeezed by rising prices, muted wages growth and government austerity measures, and with unemployment at a 17-year high, confidence is at a 34-month low.
Most retailers are nervous about spending in the key Christmas period and discounting is at unprecedented levels.
And with retailers' rent for the first quarter of 2012 due at the end of the week, fears are growing of a wave of retail failures equivalent to that which saw Woolworths go under in 2008-9.
However, stellar trading figures from John Lewis on Thursday for the first four days of this week boosted UK store groups' hopes of a late rush of Christmas shoppers.
"Trade is indeed booming at John Lewis this week, but it remains to be seen how typical their performance is, how much they have been helped by strong online business, and how much the hard-pressed consumers have left to spend when the so-called 'real' sales start early next week," said retail analyst Nick Bubb.
With unprecedented demand for Internet shopping fulfilment companies are struggling to keep up.
Yodel, the UK's largest consumer delivery company after Royal Mail, told the Financial Times it is failing to deliver about 15,000 parcels daily in the run-up to Christmas, as it struggles to handle over 1.5 million deliveries a day.
(Reporting by James Davey; Editing by Paul Sandle and Mike Nesbit)