The Woolworths brand could be sold within a week as potential buyers including Theo Paphitis, the entrepreneur and Dragon’s Den judge, line up possible bids for the failed variety retailer.

Neville Kahn, the Deloitte partner who is leading the administration process, said on Sunday that he would be talking to interested parties on Monday and expected to have a preferred bidder for the retailer’s brand and a large number of stores by the end of the week.

The publicity surrounding the collapse of Woolworths, which fell into administration last week, putting 30,000 jobs at risk, appears to have encouraged shoppers into its stores, with like-for-like sales up 20 per cent on the day after Deloitte was appointed administrator.

Mr Kahn declined to comment on the identity of potential bidders, but Mr Paphitis, who owns the Ryman stationery chain, is known to have requested more information.

Endless, the Leeds-based turnround investor, has expressed its interest, while other private equity groups likely to consider a bid include Cerberus, Sun European Capital and Alchemy Partners.

However, in spite of Deloitte’s confidence, several retail observers are sceptical that Woolworths will be sold and believe that Mr Paphitis along with other mooted bidders will end up uttering his business television show’s trademark line “I’m out”.

Malcolm Walker, the chief executive of the Iceland supermarket chain, told the FT last week that he would not be making a bid now that Woolworths had fallen into administration even though he wanted to buy the 800-store chain earlier this year.

Hilco UK, the retail restructuring specialist, whom Deloitte has appointed to run the stores on an interim basis, does not want to buy the stores out of administration even though the firm had tried to do a deal with the Woolworths directors in the days before its collapse.

Baugur, the Icelandic investment group, which was Woolworths’ second biggest shareholder, has also decided not to pursue a deal.

Finally, Ardeshir Naghshineh, the biggest shareholder, is rallying financing for a possible bid but even the property investor’s ardour for the chain appears to have cooled.

Whether or not the brand is sold, individual stores have generated a high level of interest from other retailers even in the teeth of a fierce consumer downturn. Many occupy prime positions on the high street and have appropriate licensing to sell food.

Supermarkets including Iceland, Tesco and Asda are in talks to buy tranches of the store portfolio.

There are more serious doubts that a buyer will be found for EUK, Woolworths’ wholesale arm, which sells CDs, DVDs and books to a number of supermarkets. With suppliers to EUK owed millions of pounds and its customers looking to source products directly, the value of the business is being eroded every day.

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