The owner of the UK's largest naturist holiday operator is to sell all of its struggling UK brands, after it failed to negotiate a sale with a potential buyer.

Travelzest, which owns nudist firm Peng Travel and a number of luxury brands, saw its share price drop 25 per cent on the back of the news, to 6.25p at 11.36am.

The group said it would focus on its Canadian operations and 'divest of all of its underperforming UK assets'. The strategy follows the collapse of takeover talks with Canadian firm Red Label, whose offer 'significantly' undervalued the company, says Travelzest.

Travelzest said it would retain a base in the UK to oversee developing brands, such as the website flight.co.uk, but expected 90 per cent of its revenue and profit to come from Canada in the future.

The group confirmed that the sale process was already under way and that potential buyers had been identified for a number of the businesses already, although it did not divulge which.

The measures are expected to increase profit by up to £1.5 million a year.

Mark Molyneux, Travelzest's chairman, commented, 'Following the termination of discussions with Red Label, we will now focus all our efforts on generating profitable growth in order to maximise shareholder value. The key growth area for the company remains Canada, and we will concentrate the company's efforts in this market.

 'By divesting those assets that are not performing, particularly (in the current very difficult economic climate) in the UK, which contrasts with much better conditions in Canada, we are building a stronger business that is well positioned for future growth,' he added.

In July, the group said UK summer departures were down 57 per cent on the previous year.

Travelzest owns luxury brands Best of Morocco and Captivating Cuba. Its UK portfolio includes JMB Travel and VFB Holidays, while its Canadian operations include itravel2000 and The Cruise Professionals.