Allied Carpets Properties, the division of Allied Carpets that owns the leases on its stores, is set to be placed into administration.
BDO Stoy Hayward has been lined up to handle the administration process, which could mean the closure of many of its 218 stores, spread across the UK.
Allied Carpets Properties, which has been losing about £2m a month, was taken over by Hilco earlier this year through an offshore fund called Sigma Capital.
The move is part of a larger plan to restructure the business and its debt, and to reduce its operations.
Selling some of the leases on the underperforming stores will help to reduce debt levels, it is hoped.
Allied Carpets, Britain's second largest carpet retailer, has suffered from a drop in sales during the current economic crisis, due to consumers putting off larger purchases for the home.
