UPDATE 2-Sun Capital buys sofa firm ScS's shops, saves jobs

(Recasts with source comment, background)

By Mark Potter

LONDON, July 3 (Reuters) - U.S. investor Sun Capital Partners has agreed to buy the trading arm of ScS Upholstery SUY.L, safeguarding an estimated 3,000 jobs after the sofa firm became the latest UK retailer to go into administration.

ScS, whose shares have plunged over 90 percent this year as cash-strapped shoppers have cut back on expensive purchases, said on Thursday it had sold its 96 stores for a nominal sum, meaning shareholders are unlikely to get anything from the deal.

However, ScS said Sun Capital Partners had agreed to provide considerable working capital to allow the business to continue to trade and to pay its creditors.

ScS employs around 1,300 people, and one industry source said that, including suppliers reliant on the firm's business, the deal helped to safeguard around 3,000 jobs.

"We now have sufficient liquidity to protect our employees, our customers and our suppliers and secure the future growth of ScS," Chairman Mike Browne said in a statement.

ScS is the latest in a series of small British retailers to go into administration, a form of creditor protection, as indebted shoppers cut back on spending amid higher food, fuel and borrowing costs.

Other recent casualties include shoe seller Dolcis, clothing chain Ethel Austin and beds retailer Sleep Depot.