Retail giant Baugur has applied for bankruptcy protection after talks about potential restructuring were ended.

The group has major stakes in Hamleys, high street store House of Fraser and frozen food specialist Iceland.

After Iceland’s Landsbanki cut talks short regarding a potential restructuring, Baugur applied to the district court in Reykjavik for a moratorium process, which would enable it to stop paying creditors in a similar way to chapter 11 bankruptcy procedures in the US.

“This morning Baugur Group and a number of its wholly owned subsidiaries… have applied to the district court in Reykjavik to enter into the moratorium process,” a statement said.

“This action has been taken in order to protect the group’s assets as well as the interests of all creditors.

“The board of the company unanimously resolved to take this action following yesterday’s decision by Landsbanki to discontinue discussions regarding a potential restructuring of the group.”

Baugur employs about 55,000 people in the UK and has interests in a host of high street fashion stores such as Karen Millen, Oasis and Warehouse.