Icelandic investment group Baugur has sold discount fashion chain MK One to retail restructuring specialist Hilco for an undisclosed sum.

The loss-making chain, which has 172 shops and about 2,500 UK staff, was sold as a going concern.

Baugur paid GBP55m (US$109m) for MK One in 2004, but plunged to a GBP17.4m loss last year after failing to compete with cut-price rivals like Primark and supermarkets such as Tesco and Asda.

The company said MK One no longer fitted into its retail portfolio - which includes fashion stores Karen Millen, Coast, and Oasis.