Department store chain Debenhams has confirmed it is starting to wind down all of its operations after JD Sports pulled out of rescue talks.
The 242-year-old department store chain said its administrators have "regretfully" decided to start its liquidation process, while continuing to seek offers.
Debenhams said it will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.
"On conclusion of this process, if no alternative offers have been received, the UK operations will close," the company said in statement.
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."
Debenhams has already cut 6,500 jobs across its operation due to heavy cost-cutting after it entered administration for the second time in 12 months.
It is understood that the collapse of the deal is partly linked to the administration of Arcadia, which is the biggest operator of concessions in Debenhams stores.
Debenhams says its administrators FRP Advisory have "regretfully concluded that they should commence a wind-down of Debenhams UK, whilst continuing to seek offers for all or parts of the business."
FRP had been enlisted to seek a buyer for all or part of the UK business or to carry out a further restructure of Debenhams’ operations to go forward on a standalone basis.
Now, Debenhams says that, given the current trading environment and the likely prolonged effects of the Covid-19 pandemic, the outlook for a restructured operation is highly uncertain, triggering a wind-up of the business.
Debenhams says it will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.
After that, if no alternative offers have been received, the UK operations will close.
By the summer the chain had already shut 18 stores, including the Gateshead Metrocentre store where it was unable to agree rent with landlords Intu. It still has stores in Newcastle's Eldon Square and in Sunderland and Middlesbrough.
The decision does not impact Magasin du Nord in Denmark, which continues to operate independently.
Geoff Rowley of FRP Advisory, joint administrator to Debenhams and Partner at FRP, 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.
"We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.”
