Blacks Leisure shares have fallen 13% after it said a sharp downturn meant it would breach terms of its bank loans.
"Unexpected difficult trading" at loss-making stores and its FreeSpirit and O'Neill shops were blamed by the firm.
Its bank, Lloyds, has said it would waive the breach of its covenants until November if Blacks gets an approved turnaround plan in place.
The "ongoing prospects of the group will be uncertain", without the bank's leniency, Blacks warned.
It said it had appointed KPMG as an adviser to "evaluate the full range of options available".
The firm has 43 O'Neill and Freespirit stores, which contributed to the group's £6.8m like-for-like pre-tax loss in the year to 28 February 28.
It currently has 256 Millets stores and and 116 Blacks Outdoor outlets.
Blacks' original plan was to convert its boardwear stores into branches of either Blacks or Millets.
However it has been reported that the bank was unhappy with this solution, and had demanded more radical approach.
Analysts suggested other options include putting Sandcity - the subsidiary that owns the rights to the O'Neill brand in the UK as well as 14 of the loss-making stores - into administration.