House of Fraser has fallen into administration, endangering the future of 17,000 staff.
The department store chain said discussions between interested investors and its main creditors did not conclude in a "solvent solution" and it has no choice but to appoint administrators.
But House of Fraser said parts of the department store could still be rescued, most likely through a pre-pack administration process, where a new buyer cherry picks the best assets.
The company said "significant progress has been made" in reaching a sale of the group's business and assets.
EY, which is expected to be appointed administrator on Friday, will continue discussions with interested parties in the hope of reaching a deal "shortly after their appointment".
Would-be suitors include tracksuit tycoon Mike Ashley and Philip Day, the billionaire owner of Edinburgh Woollen Mill.
House of Fraser assured that its offices and stores will continue trading as normal while they look to reach a deal.
"All stores will be open for business as usual today," it said in an announcement to the Luxembourg Stock Exchange.
Chief executive Alex Williamson said: "We are hopeful that the current negotiations will shortly be concluded.
"An acquisition of the 169-year-old retail business will see House of Fraser regain stability, certainty and financial strength.
"In the two weeks since the Cenbest and C.Banner transaction ceased, the directors have brought forward a number of potential buyers and the group's financial advisers have run a comprehensive M&A process to identify and then develop other third party interest that has culminated in the senior secured creditors leading negotiations with parties at a critical pace."
House of Fraser has been plunged into fresh crisis after C.banner, the Chinese owner of Hamleys, pulled its investment into the troubled retail chain.