Denim chain G-Star Raw has collapsed into voluntary administration, leaving around 200 jobs at risk.
The local arm of G-Star Raw, a Dutch brand founded in 1989, runs 57 outlets in Australia.
Administrators from accounting firm Ernst & Young (EY) have been appointed and are conducting an "urgent assessment" of G-Star Australia.
They say major commercial landlords are the significant creditors of the company.
"Traditional retailers were already facing business challenges before COVID-19. COVID-19 has certainly increased those pressures," administrator Justin Walsh from EY said.
"We expect that as lockdowns are lifted and various levels of government stimulus take effect, retailers will experience an uptick, however the impact remains significant."
While panic buying of groceries spurred by coronavirus fears led to a record surge in retail sales in March, sales of clothing and footwear collapsed, as people reduced discretionary spending due to growing uncertainty about job security and income.
Retailers had already faced a difficult start to the year, as some saw sales affected by the horror bushfire season.
Chains including fashion retailer Bardot, department store Harris Scarfe and denim brand Jeanswest had all closed down stores after entering voluntary administration.
Rental negotiations as stores reopen
This latest retail collapse comes as some chains begin to reopen stores, after shutting their doors due to restrictions and social distancing measures to limit the spread of COVID-19.
Several retailers have publicly announced that they will seek to renegotiate their rent or end leases as they face reduced sales and a collapse in foot traffic in shopping centres.
After closing stores in late March, major retail group Premier Investments, which owns Peter Alexander, Smiggle and Portmans, stopped paying rent.
This week, as it began to reopen stores, Premier said it would only pay back some of the rent it owed, as a percentage of its gross sales.
Premier's sales were down 74 per cent over the six weeks to May 6, compared to the same period last year.
