Convenience chain My Local is on the brink of collapse, with consultancy firm KPMG reportedly working with the business.

Although the chain is yet to confirm its next move, it is widely anticipated that the business will be placed into administration within the coming weeks.

According to The Guardian, Morrisons – who sold the stores to My Local last year – could face liability of up to £20m.

The sale reportedly included a term that Morrisons would retain a guarantee on a number of lease obligations, meaning that several premises would revert to Morrisons in the case of a My Local collapse.

KPMG is now said to be looking into several options for My Local, including the sale of around 10 stores to the Co-operative Group.

In a statement, Morrisons said it was “saddened and disappointed to learn that My Local is about to enter into administration”.

“We hope that My Local is able to continue to trade but if it does unfortunately have to close stores, we would re-employ any colleagues that want to re-join Morrisons, and that previously worked for us and transferred to My Local in October 2015.

“We would welcome those colleagues back to Morrisons within 6 months of the individual store or head office closure.”

The supermarket added that it would also welcome applications from those who hadn’t previously worked for Morrisons.

Figures from the Local Data Company recently revealed that the number of convenience stores in the UK rose by a fifth to the end of 2015, sparking concerns that the market had become saturated.

Meanwhile, IGD found that symbol groups’ store numbers had fallen by 0.7% in 2015, as supermarkets enjoyed the fastest growth in the convenience sector.

Since the sale of its M Local chain, Morrisons has retained a presence in the convenience market by partnering with Motor Fuel Group to operate a number of forecourt stores around the UK.