About 2,200 staff at JJB Sports are to be made redundant after the sports clothes and equipment retailer was placed into administration.
The administrators said they had managed to save 550 jobs after selling part of the business to Sports Direct.
JJB's High Street rival is buying the website and 20 of its stores, which will be rebranded Sports Direct.
The remaining 133 JJB stores are to close immediately, the administrators KPMG said.
The Wigan-based retailer was hurt by the economic downturn and struggled to compete with Sports Direct.
'Not been enough'
Dave Whelan, the current owner of Wigan football club, founded JJB Sports in 1971, before selling it in 2007. He said the firm should have been able to deal with the competition.
"When I sold it - I sold it something like five years ago - just before that it was valued at a billion pounds.
"Now it's completely worthless and it's amazing how it's happened," he told the BBC.
The administrators, KPMG, said they had kept on 167 employees to assist them and that all staff made redundant have had their arrears of wages and holiday entitlements paid in full.
"Successive attempts to restructure the business, both financially and operationally, have not been enough to prevent the company falling into administration," said Richard Fleming, the UK head of restructuring at KPMG.
The administrators said they had spoken to more than 100 parties in the first few days of their appointment - including eight trade and private-equity firms tabling bids - but the level of cash on offer and other factors were not enough.
"Unfortunately a buyer could only be found for 20 stores on a going-concern basis."
'That was it'
In Scotland, more than 350 jobs are being lost with the closure of 26 stores. Only four units will remain open.
Fraser Harrower worked as a sales adviser at the Dunfermline branch of JJB, which was closed down this morning. He told the BBC that two administrators walked in unannounced.
"At around 11:30 this morning we had two administrators walk in and they were there for all of maybe 90 seconds and my assistant manager came out and we were told to close the shutters and the business was closed. That was it."
Earlier this year, JJB announced a £30m investment to help turn around the business, including £20m from US retailer Dick's Sporting Goods and £10m from existing shareholders.
However, just three months later, shares in JJB tumbled after Dick's Sporting Goods said it had in effect written off its entire investment.
In August, it put itself up for sale after it failed to raise new funds to help revamp its stores.