UK fashion label Luella has ceased trading after the company's main source of capital removed funding from the venture.

For the company, the brainchild of journalist-turned-designer Luella Bartley, it was the second of two major blows after its main ready-to-wear producer, Italy's Carla Carini, collapsed in October.

Now VSQ Limited, a subsidiary of retail group Club 21, has said it will not be investing further in Luella Bartley Ltd.

No reason was given for the decision.

"This is a very disappointing situation for everyone involved with the brand," said Bartley.

"I have had an incredible team around me and very much appreciate the support that VSQ have given me, but it is upsetting not to be able to protect jobs in this difficult economic climate."

Bartley hinted that the business might be resurrected in another form, saying that she was considering "a number of options".

Ten years after the label's launch, its quirky designs have won over a number of celebrity fans, including model Kate Moss and singer Lily Allen.