LONDON (AP) — Whittard of Chelsea, a venerable British tea and coffee merchant, is on the brink of collapse, a person close to the company said yesterday as bad news continued to plague the country's retail sector.

"The most likely option for Whittard is a pre-pack administration," said a spokeswoman, who spoke on condition of anonymity because the arrangement was not yet finalised.

Administration is a form of bankruptcy protection, in which administrators are appointed to salvage as much of a company as possible for the benefit of its creditors. In a pre-pack administration agreement, a company's assets are separated from its liabilities, enabling assets to be sold more quickly.

If Whittard collapses, it would be the latest in a series of iconic British retail brands to crumble because of the economic turmoil — joining 99-year-old general store, Woolworths, and dressmaker to the queen, Hardy Amies.

The news that Whittard could be on the brink of collapse comes as a partner at insolvency specialist Begbies Traynor predicted that as many as 15 "major" British household-name retailers could fail by the middle of January.

Nick Hood told The Associated Press that British retailers have been forced to offer large discounts to get shoppers into their stores during the key Christmas shopping period, and yet overall sales were still down.

That could drive many to bankruptcy or fire sales, he said.

"They aren't making any money this Christmas, and so they aren't putting away fat for the long retail winter," said Hood.

Hood said Whittard, which yesterday was offering sale prices of up to 50 percent on its website, was a prime example of the kind of retailer that won't be able to survive the consumer spending slowdown — a consequence of the global financial crisis and deep slump in Britain's housing market and financial services industry.

Analyst Freddie George at brokerage Seymour Pierce said in a research note to British retailers that: "It's official — this will be the worst Christmas for many years."

"Almost all the retailers reporting will disappoint based on our figures," George wrote.

In total, 356 British retail companies collapsed during the third quarter of 2008 — 39 percent more than the same period last year — according to The Insolvency Service.

Whittard has been selling tea since London merchant Walter Whittard founded the company in 1886, when Chinese and Indian teas were popular among British consumers, on the city's famous Fleet Street.