* Focus DIY seeks to appoint E&Y as administrators
* Company employs 3,919 people at 178 stores
(Adds source comments, more detail, background)
By Mark Potter
LONDON, May 4 (Reuters) - British home improvements chain Focus DIY is preparing to appoint administrators, putting almost 4,000 jobs at risk amid sluggish consumer spending, rising costs and fierce competition.
Focus DIY, majority-owned by private equity firm Cerberus, said on Wednesday it was seeking consent from its lenders to appoint E&Y as administrators "following notification of an event of default under the senior credit facility."
A person familiar with the matter said the company was struggling to meet its financial obligations due to a protracted period of difficult trading conditions.
Focus DIY, which employs 3,919 people at 178 stores, has been struggling for years with a weak housing market and stiff competition from rivals like B&Q, Homebase and Travis Perkins.
A company backed by Cerberus bought the business for 1 pound ($1.65) in 2007, taking on about 200 million pounds of debt, and two years later Focus DIY agreed a company voluntary arrangement (CVA) with creditors to close its weakest stores.
Britain's retail sector saw a string of high-profile failures, including sweets-to-DVDs chain Woolworths and music and books chain Zavvi, in the depths of the recession in 2008-9.
Last month, wine chain Oddbins fell into administration and corporate recovery firm Begbies Traynor warned of a rise in companies in financial distress, particularly among those exposed to consumer spending.
Kingfisher, which runs the B&Q chain, has said in the past it would look at picking up individual Focus DIY stores should they become available. (Editing by Kate Holton and Andrew Callus)