Sky News understands that Authentic, which also owns Ted Baker and Reebok, has been named the preferred bidder for Hunter as a sale process which has been running for more than two months nears a conclusion.

One source suggested that a deal could value Hunter at as much as £100m - well ahead of previous expectations.

China's BaoZun, a digital commerce group which owns Gap's operations in Greater China, remains interested in a deal if the talks with ABG falter, the source added.

In March, Hunter Boot secured a multimillion pound funding lifeline, with existing shareholders injecting £5m into the business and lenders contributing a further £2m.

Hunter, whose boots have frequently been seen adorning festival-going celebrities such as Kate Moss and the Princess of Wales, has been working with advisers at AlixPartners on the auction.

The company was last saved in 2020 through a £16.5m capital injection, part of which came from Pall Mall Legacy, a fund backed by Goldman Sachs.

Pall Mall Legacy owns the majority of Hunter's shares, with Searchlight Capital Partners, a private equity firm, and Pentland Group, the sportswear giant behind brands such as Speedo, holding the remainder.

Hunter, which was founded in 1856 as the North British Rubber Company, has seen a post-COVID rebound in sales, with revenue in China accounting for a chunk of its growth.

Hunter is one of only 10 companies to hold two royal warrants - one of which was issued by the late Queen Elizabeth II.

The cancellation of live entertainment events and music festivals such as Glastonbury during the pandemic had a severe impact on Hunter.

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The company was historically dominated by sales of Wellington boots, but has diversified into a broader array of lifestyle products.

It has exited its retail store portfolio such as its former flagship on London's Regent Street with the exception of a site at Bicester Village and Woodbury in New York.

A spokesman for Hunter declined to comment, while ABG could not be reached for comment.