Electronics retailer Maplin has been forced to call in the administrators after rescue talks with Edinburgh Woollen Mill broke down.
CEO Graham Harris attributed the company's immediate ills to the economic uncertainty and a lack of consumer confidence following the Brexit vote.
However, the killer blow was struck by the removal of trade credit insurance late last year as insurers removed cover, forcing suppliers to demand payment up-front for goods.
The company has confirmed that 2,500 jobs are at risk, but that the company will continue trading throughout the administration process, raising hopes that a viable business will emerge from the process at the other end.
Maplin's private equity owner, Rutland Fund Management, was in talks with Edinburgh Woollen Mill, but those talks came to nothing.
In a statement, Harris said: "I can confirm this morning that it has not been possible to secure a solvent sale of the business and as a result we now have no alternative but to enter into an administration process.
"During this process, Maplin will continue to trade and remains open for business.
"The business has worked hard over recent months to mitigate a combination of impacts from sterling devaluation post-Brexit, a weak consumer environment and the withdrawal of credit insurance.
"This necessitated an intensive search for new capital that in current market conditions has proved impossible to raise. These macro factors have been the principal challenge not the Maplin brand or its market differentiation.
"We believe passionately that Maplin has a place on the high street, and that our trust, credibility and expertise meets a customer need that is not supported elsewhere.
"We will now work tirelessly alongside Zelf Hussain, Toby Underwood and Ian Green, from PWC, who have been appointed as the as Joint Administrators of Maplin Electronics Limited, to achieve the best possible outcome for all of our colleagues and stakeholders."
Just hours before Maplin's announcement, it emerged that Toys R Us had also fallen into administration, putting another 3,000 UK-based retail jobs at risk.
Maplin has until the end of the day to complete negotiations over a takeover deal or risk being placed in administration.
It comes after suppliers removed trade-credit insurance just before Christmas, requiring it to pay upfront for goods. That measure indicated insurers' negative prospects for the company's immediate survival.
Now, according to Sky News sources, the company has just hours left to strike a deal - or call in the administrators.
It is believed that Maplin has found a potential suitor and hopes to reach a takeover agreement before the close of play on Wednesday.
The company employs 2,500 people across the country. It confirmed last week that it faced the possibility of administration following a fall in sales largely wrought by stiff price competition from internet retailers.
Maplin is thought to be deep in talks with retail chain Edinburgh Woollen Mill (EWM), which also owns Peacocks and Ponden Home, over a takeover.
It is currently owned by private equity firm Rutland Partners, having been passed from pillar to post since its 1994 sale to hedge fund Saltire plc, which itself was liquidated in 2010.
Rutland Partners acquired Maplin from Montagu Private Equity for £85 million in 2014.
However, negotiations between Rutland and Edinburgh Woollen Mill, which is owned by Dubai-based British billionaire Philip Day, are said to be going slowly.
It is understood that EWM wants Rutland to continue having a stake in the company. Sources said it "must be willing to play a role in the future of the company" for a deal to happen.
Although no financial details about the deal have come to light, sources believe that Maplin needs an infusion of capital running into millions in order to revive the business and restock shelves. No deal will mean that the company will need to call in the administrators, who will either execute a vigorous restructuring - or close the whole chain down.
A person close to Rutland claims that the company is "open-minded" about a potential deal with EWM and is willing to participate.
It could take part in what is known as a 'pre-pack administration', which would involve an administration procedure intended to slash costs without the charges typically associated with cost-cutting, such as redundancy payments, but with EWM and Rutland waiting at the other end to buy-out the newly profitable business.
Currently, it is not known whether any other interested parties have approached Maplin about an acquisition.
Last week, Maplin confirmed that it was trying to find a buyer. A spokesperson for the firm said: "We are in advanced talks with a number of parties and expect to be in a position to announce a solvent sale of the business within days.
"Once secured this will stabilise the business to the benefit of all stakeholders and provide Maplin with the financial firepower to deliver its 2020 multichannel strategy focused on smart tech."
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