TALKS are under way to save Liverpool discount chain TJ Hughes before an eight-day “grace” period expires.

The struggling retailer filed its intention to appoint an administrator on Monday, after reports a supplier was preparing to file a winding-up petition.

The chain now has 10 days protection from creditors in which to try and find a buyer or investor for as many of its 57 stores as possible, and protect as many of its 4,000 workforce as it can.

London Road-based TJs suffered an alarming downturn in fortunes after posting improved pre-tax profits for the year to January 2010 which rose from £5.25m to £6.8m.

However, it is understood TJs lost £10m in the year to January this year, and industry sources claim like-for- like sales have declined a further 19% since Leeds-based turnaround specialist Endless bought the business for a “nominal amount” in March. The situation was worsened by the withdrawal of cover by credit insurers for suppliers, which protects them in the event of a collapse.

A spokesperson for Endless admitted: “TJ Hughes had a very poor 2010 where heavy losses were experienced, and that led to a rescue refinancing in March. Since March, the business has experienced further problems with waning customer demand, but the key has been the loss of the credit and supplier insurance support.”

She added: “As a result, we are currently exploring opportunities for the business, which include selling some or all of the stores and hopefully seeing most of the jobs being secured.”

John Gorle, a national officer with retailing trade union Usdaw said: “The company has assured Usdaw that they will continue to pay staff as normal and that there are no immediate plans for any store closures or redundancies.”