Up to 160 jobs are in jeopardy after the recession led to the collapse of Leicestershire's largest bakery firm.

Finchwade, which trades as Coombs Hampshires and has 26 stores across the county, has gone into administration after suffering a sharp drop in trade.

Administrators said they were looking to sell the business, which is based in Claymill Road, Rushey Mead, Leicester.

No redundancies have been announced and the business is continuing to trade. The company was formed three years ago when Hampshires Bakery bought Coombs Quality Bakers out of administration.

It has stores in Leicester, Syston, Wigston, Birstall, Blaby, Narborough, Melton, Loughborough, Hinckley, Earl Shilton, Anstey, Shepshed, Barrow-upon-Soar and Ashby.

Joint administrator Eddie Kerr, of Leicester accountants PKF, said: "This is pretty much due to the downturn and the difficult trading conditions it has created. There is also a lot of competition out there in the market. There have been no job losses and the company is continuing to trade."

He said breaches in health and safety regulations, which led to a fine of £5,000 earlier this year, had nothing to do with the collapse.

Mr Kerr said the company's existing management, Keith Baxter and son Adam Baxter, were considering buying back the business.

"We are hoping to get a buyer," he said. "It has a good name and I'm quite optimistic it will do well. Hopefully, in the next few days we will have some positive news."

The Leicester Mercury contacted Keith and Adam Baxter for a comment, but neither was available.

A shop worker, who did not want to be named and did not want the store where he worked to be identified, said: "We had heard rumours about this, but no one in the management had told us it had gone into administration.

"I am concerned about the future and that I am going to lose my job."

Another worker, who also did not want to be identified, said: "We weren't told anything by the bakery. We heard it through word of mouth when we were talking with people from other shops.

"As far as we know a couple of shops might be closing, but we've not been told anything about whether our jobs are safe or not."

Customer David Killen, 36, from Beaumont Leys, Leicester, said: "It just goes to show that if a big company like Coombs can get into trouble smaller businesses haven't got a chance.

"It's another victim of the credit crunch. It will be sad if they close. Coombs has been around for years. It is a part of Leicester."