Red seems to be the new black for the Fashion and Textile Museum in Bermondsey, south London, after its owner, Zhandra Rhodes, confirmed that the building, which houses both the museum and her studio, is up for sale.

The museum, which opened in May 2003, was closed in February this year when it ran out of money. This has meant redundancies, and the future of the collection, which includes some 3,000 garments donated by designers including Ossie Clark, Jean Muir, and Mary Quant, alongside Rhodes' own work, is in question. Part of the display is still open to booked groups by appointment only.

Rhodes would not be drawn on the number of redundancies, but Madeleine Ginsburg, the museum's curatorial adviser, confirmed that the museum's creative director had left and that it was 'gearing down to decide what happens next'.

Rhodes said she was currently 'finalising negotiations' with a college that might allow the museum to reopen with a focus on education rather than exhibitions. She refused to name the college, although insiders suggested that it may be Newham College, which has had links with the museum in the past.

The museum, which was largely funded by Rhodes, reached a crisis point after failing to attract funding from the lottery, despite a number of applications. 'I had to stop everything I was doing, and we had to find all the money ourselves,' said Rhodes.

Nicky Ryan, a senior lecturer in visual culture and theory at the University of the Arts in London, said: 'The fact that the core of the collection was her [Rhodes'] work might have been a deterrent to public funding, but I'm surprised that it didn't get any public funds for its educational work.'

Ryan stressed the importance of the museum as an example to designers who might be thinking about archiving their work, as a regeneration tool for Southwark, and for widening access through its fashion exhibitions. She thought other museums would be interested in parts of the collection, 'but it is doubtful they would want to take it en masse'.

Eleanor Thompson, the curator of dress and decorative art at the Museum of London, said: 'The loss of any museum is very sad, and the Fashion and Textile Museum worked hard to get people who don't normally come into museums, especially younger people, to come in.'

Negotiations over the museum's future are ongoing, but the worst-case scenario remains that the building is sold and the collection is dispersed. But Rhodes is determined to fight. 'I never accept a worst-case scenario. I put myself on the line and I don't let it happen.'

The museum's official website may be the best indicator of the turmoil behind the scenes. Under the heading 'Future', it just has the words 'Coming soon'.

Patrick Steel