Music and DVD chain HMV is to appoint an administrator, making it the latest casualty on the High Street and putting about 4,350 jobs at risk.
Deloitte will keep HMV's 239 stores in the UK and the Republic of Ireland open while it assesses the prospects for the business and seeks potential buyers.
Trading in HMV shares on the London Stock Exchange has been suspended, HMV said in a statement.
The firm said it would not be accepting gift vouchers or issuing any more.
HMV, which was started in 1921, has struggled against online retailing.
The company's troubles underline the gloom on the High Street and come after a string of high-profile failures, including the closure last week of camera retailer Jessops and the collapse of electrical goods chain Comet last year.
In its statement, HMV said: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect."
The statement continued that the board "understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business".
The company has been in financial crisis for more than a year, and on 13 December warned that it faced a possible breach of bank loan agreements, sending its share price plummeting.
The retailer, whose first store was opened in London's Oxford Street in 1921, has faced intense competition from online retailers, digital downloads and supermarkets in recent years.
As its debts mounted, HMV sold off parts of the business, notably its live entertainment arm and the Waterstones book chain.
Last week, HMV announced a month-long sale with 25% off prices, sparking worries that the company needed to shift stock after poor Christmas trading. The Financial Times reported that the final straw came over the past few days when suppliers, including music labels and film companies, declined to help HMV with funding so that it could continue trading.
Chief executive Trevor Moore joined the firm last year from camera retailer Jessops, which has since closed.
Maureen Hinton, analyst from Verdict Research, said that HMV was slow off the mark when it came to digital sales.
"If it had gone online 10, 15 years ago, it's got a very strong brand name, it could have built up a real presence," she told the BBC. "But at the moment if we think online you just think Amazon."
Neil Saunders, the managing director of retail analyst Conlumino, said he felt the appointment of administrators at HMV "was always inevitable".
He said that although the HMV brand "certainly has some value" for potential buyers, the current business model was dead.
"The bottom line is that there is no real future for physical retail in the music sector," he said.
Andy Heath, chairman of UK Music and director of the record company Beggars Group, denied that HMV had been "slaughtered" by the internet, but did admit that the firm had been "wounded very badly".
"They haven't been in the right corporate shape to fight the competition of the internet in the way that they should be," he told the BBC Radio 4's Today programme.
"They've been operating under what is probably a bit of an archaic structure - there's probably too many stores, some of them are probably the wrong size, some of them are probably in the wrong place."
He added: "I think there is a place for a chain but I think the chain needs to be focused in a way that HMV was unable to be focused.
"HMV was a legacy business operating under different market circumstances 20 years ago and it found itself in a place with leases and so on where it was unable to be as agile as it needed to be to survive. But fundamentally there's a very decent business in there."
High Street 'holes'
HMV's demise is the latest blow for the UK High Street:
- Camera chain Jessops went into administration last week and its shops closed their doors for the last time on Friday, resulting in the loss of about 1,370 jobs
- The last Comet stores closed in the week before Christmas after the electrical retailer ran out of credit
- Some 2,200 staff at JJB Sports were made redundant after the sports chain fell into administration; rival Sports Direct bought 20 of its stores, but the remaining 133 closed in October
- Clinton Cards went into administration in May; a US company later bought the brand but 350 out of a total of 784 stores closed, leading to the loss of 3,000 full or part-time jobs
Matthew Hopkinson, from the Local Data Company, said the HMV development was particularly worrying for shopping centres.
"If you take it into account what we've seen in Jessops, all happening within one week, there are going to be some major holes in the High Street.
"And HMV particularly has some very large stores - and obviously over 60% of their stores sit within shopping centres. So shopping centres will be hardest hit."