Micro Anvika has appointed a business recovery firm to investigate restructuring options for the electrical retailer.
Re10 has issued letters to all of retailer's suppliers stating the "best option" is a voluntary arrangement (CVA) rather than putting the firm into liquidation followed by administration.
Re10 blamed "under performing locations and large administrative costs" for the slump in sales experienced by the consumer electronics retailer, which was formed in 1984. The retailer has seven stores across the UK, most of which are situated in London and the south east.
"These factors have impacted on the company's profitability and a restructuring process is necessary to return the company to profitability," the letter reads.
The directors of the retailer are currently fleshing out proposals for the CVA that will be enforce for the next five years. They include the closure of any poorly performing shops, a reduction in admin costs and a freeze on bonuses and pay rises for the directors of the firm and dividends for shareholders.
"The company is actively seeking to close under-performing sites, reduce administrative costs and continue to operate profitable sites in the period leading up to the meeting," Re10 said in the letter.
The proposals will have to be approved by members and creditors at a meeting which is expected to take place in March this year.
"The directors have not taken this decision lightly and believe the company has a viable future if its current operations and finances are restructured and it continues to receive on-going support," the firm added.