Sharecast - Following a strategic review, the company - which was valued at £105m when it floated in March 2021 - has agreed to be bought by Baaj Capital.
For the purpose of the sale, chief executive Adam Frisby has agreed to take an equity position in the newly-formed bidco. Frisby will become the CEO of the business once the deal completes.
Chair Jim Sharp said: "Following a thorough review of different strategic options with our advisers and interactions with numerous parties, the independent directors have unanimously concluded that it is in the best interests of the company, its shareholders and its stakeholders to sell In The Style Fashion Limited to bidco.
"The independent directors therefore believe that under the new ownership structure - with Adam's continued leadership and Baaj's backing - the In The Style brand can continue to build on its potential whilst protecting the interests of the group's employees, suppliers and other stakeholders."
In a trading update in January, the company warned it was expecting a full-year adjusted EBITDA loss of between £4.25m and £4.75m as revenue had been hit by "market-wide cost-of-living pressures on consumer demand, higher levels of markdowns and a reduction in wholesale demand".
At 0920 GMT, the shares were down 77% at 1.61p.
Russ Mould, investment director at AJ Bell, said: "Trading has been awful and its finances as robust as a soggy Weetabix. The fashion retailer floated on the UK stock market almost two years ago to the day, valued at £105 million.
"It didn’t take long for the problems to appear and the departure of the chief executive at the end of 2022 effectively marked the captain jumping off board before the whole ship sank."