Restructuring specialist Hilco in the picture to snap up the troubled chain if board members are able to secure support of Woolworth’s lenders and shareholders.
The company has confirmed that it is in negotiations about the sale of its retail arm but refused to name a potential buyer or possible sale price.
"The Board can confirm that it is in preliminary discussions regarding a possible offer for the retail business. There can be no assurance that any offer will be forthcoming."
It has been widely reported that Hilco has been lined up to take over Woolworths' retail arm, which spans across around 800 stores, although it is unknown how much of the company's debt the turnaround specialist will be willing to take on.
Earlier today, The Times reported that Woolworths was in talks to sell its business to Hilco for just £1.
Any deal will have to be agreed by the company's banking syndicate - Burdale Financial, a division of the Bank of Ireland, and GMAC, who lent Woolworths a joint sum of £385m in January. The pair recently appointed restructuring adviser Deloitte to advise them in talks with the high street retailer last month.
Shares in Woolworths plummeted 5.81% yesterday to 3.8p.