The group is in discussions with potential purchasers interested in the online garden shop and is hoping to complete a deal by the end of June.
It comes as Flying Brands revealed a pre-tax loss of £3.2m for the year ending December 30, 2011 in its annual results. Earlier this month it announced the conditional sale of Garden Bird Supplies, Garden Centre Online and Listen2 businesses in a £0.72m deal with the MBL group. These disposals are expected to be completed "very shortly."

The group announced it has embarked on a restructuring programme to cut central overheads "to a level more appropriate to our reduced operational size." It its report, the company pointed out that the disposal of Gardening Direct should help the company pay off its debts.

In the meantime it has secured an overdraft facility of £0.25 with Barclays Bank to provide additional short-term working capital should it be required to continue the operating of Gardening Direct.

Flying Brands chairman Tim Trotter said: "In our half yearly report we announced that the first half of 2011 had been a very difficult one for Flying Brands as a result of poor trading performance across all our brands and the consequent need to renegotiate our banking arrangements.

"These difficulties continued into the second half of the year and it became apparent that the downturn in trading meant that the Company could no longer service its then level of borrowings and that this meant in turn that it could not finance its ambitions for the gifts and gardening businesses.

"We expect to be in a position to update shareholders on the progress of the discussions for the sale of Gardening Direct before the end of June 2012 and it is our intention at that time to update shareholders on the future of the Company as a whole."