Karen Millen shelves MBO plans

The owners of high street fashion retailer Karen Millen have mothballed a planned management buy-out, leading to the departure of chief executive Mike Shearwood.

The board of Karen Millen, which is 90%-owned by Icelandic bank Kaupthing with management holding the rest of the shares, said the business was not for sale "at this time".

Shearwood had joined the company after quitting its former parent company Aurora Fashions in November last year.

In a statement, Karen Millen chairman Neil McCausland said: "It was Mike's ambition to lead an MBO of Karen Millen, however, it has been decided not to sell the business at this time."

McCausland said he will work closely with the management team to "ensure the smooth and effective running of the business until a new CEO is appointed".

Founder Karen Millen herself is rumoured to still be interested in regaining her own brand name, having sold up in 2008.