Olan Mills, which traded largely out of Mothercare stores and has its headquarters in Irthlingborough, announced yesterday it ceased trading on Boxing Day and was poised to call in administrators.

Olan Mills said it was "endeavouring to fulfil all outstanding orders" for photography already taken, but admitted that those that had pre-paid for vouchers or gift boxes would have to queue up in the list of creditors for any refunds.

Its collapse will hit many families who bought photographic studio sessions as Christmas presents and it is thought that hundreds of jobs have also been put at risk.

The group said it hoped to post out photography direct to customers during January.

Those who pre-paid by credit card will be able to claim refunds from their credit card company, but customers who paid by cash, debit card or cheque will have to claim as unsecured creditors.

David Glew, 62, from Lincoln, told The Times newspaper he only discovered the company had closed down when he arrived for a studio session bought for him and his wife as a present.

"My children's present to my wife and me was a £300 family portrait session, but we went for our appointment on Saturday and the studio had closed," he said.

Olan Mills Photography specialised in baby and family portraits, with more than half its 34 UK studios based within the Mothercare chain, but it also operated stand-alone studios at sites including Coventry, Derby, Peterborough and Nottingham.