Music and film retailer HMV is preparing to appoint administrators, putting thousands of jobs at the 92-year-old retail chain at risk.
Accountants Deloitte is set to run the troubled retailer's 239 stores in the UK and Irish Republic, and it will assess the business prospects of the chain along with seeking potential buyers.
Being the latest casualty on the UK's high street, following high profile retailers including Comet and Jessops, the collapse of HMV could render about 4, 500 jobs redundant.
On 13 December, the company, which has been in distress for more than a year, warned investors of a possible breach of bank loan commitments. HMV shares plummeted following the news.
The company was in discussions with its banks and other key stakeholders in order to solve the problems, but it could not reach a deal.
"The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect," the company said in a statement.
The retailer, known for its Nipper the dog trademark, has been facing stiff competition from online retailers and supermarkets amid the ongoing economic weakness in Britain. Further, the crucial Christmas season trading was not favourable for the company.
HMV asked for about £300m (€361m, $482m) in additional financing from its suppliers to repay its bank debt, and fund the restructuring of the business, but the proposal was rejected, according to the Financial Times.
The retailer, whose first store was opened in London's Oxford Street in 1921, divested its live entertainment arm and the Waterstones book chain to continue in business. In addition, HMV announced a month-long sale with discounts up to 25 percent with a view to offloading its stock following poor Christmas business.
Trading in HMV's shares has been suspended.