Ishka in Warrnambool will remain open despite the business being placed into the hands of an administrator.
Business owner Toby Darvall said the shop, which employees eight people, would continue to trade.
But he is not sure about the future of the store.
"Things are very uncertain at this stage - the business is now in the hands of our administrators," Mr Darvall said.
He said all stores would remain open at this time.
Mr Darvall said his employees were his number one priority.
"Despite this outcome all of our staff will be paid," he said.
"They are our number one priority at this stage.
"We know the impact this can have - particularly on country areas.
"Our staff have become our family." Ishka has been operating in Koroit Street in Warrnambool since 2012.
On Wednesday Mr Darvall sent an email to members of the shop's Karma Club.
"Firstly let me personally thank you for almost 50 years of incredible loyalty to our wonderful, unique, quirky, colourful and much-loved brand," Mr Darvall said.
"We are a family owned business which has relied on amazing customers like you over the many years we have been open.
"We greatly appreciate that."
Mr Darvall said the decision came after some very tough months.
"I am sorry to have to let you know that we have made the difficult decision to put our business into voluntary administration," he said.
"So now we will try absolutely everything we can to save it and stay in business and keep our beautiful stores open.
"We are working day and night to save Ishka - but we need your help too."
Mr Darvall said the store's biggest sale would commence immediately.
"Please remain part of our tribe as we do everything to save our wonderful brand - keep shopping and tell all of your friends to please shop too," he said.
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