The Netherlands-based chain, which has outlets across Britain, summoned managers to a meeting in London yesterday where it revealed plans to halt its UK operations from July.

One source said store managers were invited to a "fun-day" in London, only to be told the company was closing down and they were to lose their jobs.

Yesterday spokeswomen from the group's Amsterdam head office and at the parent company, Liz Claiborne in New York, both refused to comment. The UK website was listing "no office" in Britain.

Mexx, founded in 1980, sells men's, women's and children's wear and operates in the US, Europe, the Middle East and Asia-Pacific region. It employs 6,000 staff worldwide and was acquired by the US fashion group Liz Claiborne in 1981. The Mexx withdrawal comes as fashion retailers are finding trade increasingly tough. City analysts believe Marks & Spencer is struggling and there is speculation that Tesco is also missing internal targets for sales of non-food lines - with fashion among the worst performers. Yesterday the supermarket chain took full-page adverts promoting 70% discounts in its clothing ranges.

Meanwhile, the fashion chain Select Retail has collapsed into administration. The 250-strong chain called in administrators UHY Hacker Young on Friday and the administrators have already sold half the outlets to a management buyout team.

The Hertfordshire-based value retailer blamed its collapse on "deteriorating trading performance in the first quarter of 2008".