Debenhams is to start a liquidation process after JD Sports confirmed it had pulled out of a possible rescue deal, putting 12,000 workers at risk.
The 242-year-old department store chain said its administrators have "regretfully" decided to start winding down operations while continuing to seek offers "for all or parts of the business".
It is understood that the collapse of rescue talks were partly linked to the administration of Arcadia Group, which is the biggest operator of concessions in Debenhams stores.
Debenhams said it will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.
Pictures of the week: November 29 - December 5
Pictures of the week: November 29 - December 5
A woman wearing a face mask takes a photo on her phone in Covent Garden, London, Thursday, Dec. 3, 2020. Britain became the first country in the world to authorize a rigorously tested COVID-19 vaccine Wednesday and could be dispensing shots within days — a historic step toward eventually ending the outbreak that has killed more than 1.4 million people around the globe. (AP Photo/Alberto Pezzali)
A member of staff polishes the 1969 Mercury Cougar XR7 convertible, which had a starring role in the James Bond film 'On Her Majesty's Secret Service', displayed at Bonhams, in Mayfair, before it is offered for the first time at auction, for an estimate price of 100.000 - 150.000 pounds sterling, in London, Thursday, Dec. 3, 2020. (AP Photo/Alberto Pezzali)
A train runs along the tracks in snowy Garsdale, on the border of Cumbria and North Yorkshire with the UK expecting more wintry weather ahead of the first weekend of December, with warnings in place for ice and snow.
Soccer fans wait for the start of the Europa League group B soccer match between Arsenal and Rapid Wien at Emirates stadium in London, England, Thursday, Dec. 3, 2020. (AP Photo/Frank Augstein)
LONDON, ENGLAND - DECEMBER 03: Final decorations are addd to the 40ft Christmas tree ahead of todays re-opening at Somerset House on December 03, 2020 in London, England. (Photo by Tim P. Whitby/Getty Images)
LONDON, ENGLAND - DECEMBER 03: Pop-up winter domes are installed in the courtyard in preparation for a new dining experience, open to the public from December 3rd to January 1st, ahead of todays re-opening at Somerset House on December 03, 2020 in London, England. (Photo by Tim P. Whitby/Getty Images)
Face masks to curb the spread of coronavirus are displayed for sale on a stall as non-essential shops are allowed to reopen after England's second lockdown ended at midnight, on Oxford Street, in London, Wednesday, Dec. 2, 2020. Pfizer and BioNTech say they've won permission Wednesday for emergency use of their COVID-19 vaccine in Britain, the world's first coronavirus shot that's backed by rigorous science -- and a major step toward eventually ending the pandemic. (AP Photo/Matt Dunham)
Elves talk to children in a winter-themed environment at Lapland UK in Whitmoor Forest, near Ascot in Berkshire, which has reopened after England emerged from lockdown.
YORK, ENGLAND - DECEMBER 02: Audience members react as they watch actors from York Theatre Royal perform Jack and the Beanstalk on December 02, 2020 in York, England. The performance is the first of a series that are part of York Theatre Royal's Travelling Pantomime production. Until December 23 the pantomime will visit every one of York's 21 wards and put on a show in community centres, schools, sports and church halls. At the start of each performance the cast will ask the audience to choose between three different panto favourites; Dick Whittington, Jack and the Beanstalk and Snow White and the Seven Dwarfs. Whichever show the audience decide on will be performed. The performance at York Theatre Royal comes on the first day of the new tier system introduced at the end of the second Coronavirus lockdown to prevent against further spread of the Coronavirus. York is in tier two and the restrictions allow for the performance in front of a limited audience to take place. Strict Covid-19 measures will be implemented in line with the current tier two guidelines. (Photo by Ian Forsyth/Getty Images)
Jessica Walker and Nicola Foster, known as the Lido Ladies, swim at Charlton Lido in Hornfair Park, London, on its first day of reopening after the second national lockdown ended and England enters a strengthened tiered system of regional coronavirus restrictions. (Photo by Victoria Jones/PA Images via Getty Images)
Lulu Kingstone, 9, looks up at Neon lights cascading down from one of Kew's heritage trees, during a preview for 'Christmas at Kew' at the Royal Botanic Gardens in Kew, London. (Photo by Andrew Matthews/PA Images via Getty Images)
Barber Ben Fessey cuts the hair of his first customer after reopening his barber shop in Moreton, north west England, on December 2, 2020 as England emerges from a month-long lockdown to combat the novel coronavirus pandemic. - England on December 2 exited a month-long lockdown into a new 3-tiered system of curbs with non-essential retail, leisure centres and salons all reopening but with some sectors, including hospitality, seeing tighter restrictions. (Photo by Paul ELLIS / AFP) (Photo by PAUL ELLIS/AFP via Getty Images)
EDITORIAL USE ONLY Food writer Angela Clutton (centre) and Edd Kimber (second right), the first winner of The Great British Bake Off, with stallholders at the launch of Borough Market's Festive Kitchen, a new three-week livestream, digital pop-up, designed to inspire Londoners and food shoppers across the UK in the run up to Christmas.
A member of staff cleans gym equipment at David Lloyd health club in Leicester as they reopen after the second national lockdown ended and England now has a strengthened tiered system of coronavirus restrictions. (Photo by Joe Giddens/PA Images via Getty Images)
The sun rises over The Solent, which separates the mainland from the Isle of Wight, after the second national lockdown ended and England entered a strengthened tiered system of regional coronavirus restrictions. Only the Isle of Wight, Cornwall and the Isles of Scilly - accounting for little more than 1% of England's population - face the lightest Tier 1 restrictions. (Photo by Steve Parsons/PA Images via Getty Images)
Passengers, wearing masks because of the coronavirus pandemic, exit a London Underground tube train during the morning rush hour in London on December 2, 2020 as England emerges from a month-long lockdown to combat the spread of Covid-19. - England on December 2 exited a month-long lockdown into a new 3-tiered system of curbs with non-essential retail, leisure centres and salons all reopening but with some sectors, including hospitality, seeing tighter restrictions. (Photo by Tolga Akmen / AFP) (Photo by TOLGA AKMEN/AFP via Getty Images)
Student Amy Hariot Ingle, 22, from Newcastle University, performing a Covid-19 test on herself, watched by David Black (right) an occupational heath specialist. Amy will be part of a mass testing across the UK starting tomorrow on December 1 2020.
A man stands by a flock of swans by the Jubilee Pond, Wanstead Flats during the lockdown. (Photo by David Mbiyu / SOPA Images/Sipa USA)
Christmas Lights are lit up in Oxford Circus
Londoners are getting ready to go back to tier 2 when a four-week lockdown in England comes to an end next week. (Photo by Pietro Recchia / SOPA Images/Sipa USA)
The moon passes behind the Shard skyscraper not long after sunrise in London Tuesday Dec. 1, 2020. (AP Photo/Tony Hicks)
EDINBURGH, SCOTLAND - NOVEMBER 30: Edinburgh's Bill Mata in action during the PRO14 match between Edinburgh Rugby and Ulster at BT Murrayfield on November 30, 2020, in Edinburgh, Scotland. (Photo by Ross MacDonald/SNS Group via Getty Images)
No Parking signs seen outside a school in East London. Schools remain open with all precautions being taken to keep pupils safe since they reopened in September as per Government advice. (Photo by David Mbiyu / SOPA Images/Sipa USA)
Britain's Prime Minister Boris Johnson holds a vial of the Oxford/AstraZeneca vaccine Covid-19 candidate vaccine, known as AZD1222, at Wockhardt's pharmaceutical manufacturing facility in Wrexham, Wales, Monday, Nov. 30, 2020. (Paul Ellis/PA via AP)
EU Chief Negotiator Michel Barnier walks with his team to Brexit negotiations at a conference centre, followed by anti-Brexit protester Steve Bray, obscured, holding pro-EU placards in London, Monday, Nov. 30, 2020. Teams from Britain and the European Union are continuing face-to-face talks on a post-Brexit trade deal with little time remaining. (AP Photo/Matt Dunham)
CARDIFF, WALES - NOVEMBER 30: A general view of members of the public walking along the Christmas Market outside Cardiff Castle on November 30, 2020 in Cardiff, Wales. (Photo by Huw Fairclough/Getty Images)
LONDON, UNITED KINGDOM - NOVEMBER 29: An Anatolian shepherd dog, brought by the owner from Turkey, is seen being taken for a walk at the streets of London, on November 29, 2020 in London, United Kingdom. The dog attracted the attention of people in the streets. (Photo by Yunus Dalgic/Anadolu Agency via Getty Images)
Freshley cut trees are loaded onto a trailer at Digby Farm Christmas Trees in Rutland. Families are preparing for Christmas after the UK Government and devolved administrations have agreed a temporary easing of coronavirus restrictions over the festive period, allowing three households to mix in a bubble from December 23 to 27.
A parakeet in a garden in Ealing, London. Photo date: Sunday, November 29, 2020. Photo credit should read: Richard Gray/EMPICS
EU Chief Negotiator Michel Barnier, left, with members of his team as he walks to a conference centre in Westminster in London, Sunday, Nov. 29, 2020. Teams from Britain and the European Union are continuing face-to-face talks on a post-Brexit trade deal in the little remaining time. (AP Photo/Kirsty Wigglesworth)
Players stand and applaud for a minute in memory of Argentine soccer star Diego Maradona prior to the start during the English Premier League soccer match between West Bromwich Albion and Sheffield United at The Hawthorns in West Bromwich, England, Saturday, Nov. 28, 2020. (Jason Cairnduff/Pool via AP)
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"On conclusion of this process, if no alternative offers have been received, the UK operations will close," the company said in statement.
Geoff Rowley, of FRP Advisory, joint administrator to Debenhams, said: "All reasonable steps were taken to complete a transaction that would secure the future of Debenhams.
"However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.
"The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.
"We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading."
JD Sports was the last remaining bidder for Debenhams, which has been in administration since April.
In a brief statement to the London Stock Exchange, the company said: "JD Sports Fashion, the leading retailer of sports, fashion and outdoor brands, confirms that discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated."
Sources close to JD Sports said the retailer saw a potential deal for Debenhams as "50-50" last week after entering exclusive talks with the high street stalwart.
However, it is understood that concerns over JD's lack of experience in running department stores and a shareholder backlash, which saw shares tumble after talks were first confirmed, contributed to the group backing out of a potential deal.
Debenhams has already axed 6,500 jobs across its operation due to heavy cost-cutting after it entered administration for the second time in 12 months.
Arcadia tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores.
Paddy Lillis, general secretary at the Usdaw retail union, said: "It is devastating news for our high streets that Debenhams' administrators have announced a closure programme.
"Throughout Debenhams' difficulties the company and then administrators have refused to engage with Usdaw, the staff are being treated appallingly, and we don't believe the law has been complied with in the past.
"Over 200,000 retail job losses and 20,000 store closures this year are absolutely devastating and lay bare the scale of the challenge the industry faces."