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High Street fashion chains Oasis and Warehouse have fallen into administration, leading to more than 200 immediate job losses.
Some 1,800 staff across the shops, concessions and head office will be furloughed and receive 80% of pay.
The brands will continue to be sold online “short-term” while the administrators try to sell the brand.
Administrator Deloitte said the coronavirus had had a “devastating effect on the entire retail industry”.
The owner of the High Street brands, Icelandic bank Kaupthing, had been in talks to sell the businesses before the coronavirus crisis.
However, the crisis, which has seen many shops temporarily close, made the sale untenable.
Rob Harding, joint administrator at Deloitte, said it had seen “significant interest from potential buyers”, but that it had not been possible to save the business “in its current form”.
“As administrators, we appreciate the cooperation and support from the management, employees, customers, landlords and suppliers, whilst we investigate options for the business. This is clearly an unprecedented and difficult time,” he added.
Environment ‘Shocking and difficult’
Hash Ladha, the chief executive of Oasis Warehouse, said: “This is a situation that none of us could have predicted a month ago, and comes as shocking and difficult news for all of us.
“We as a management team have done everything we can to try and save the iconic brands that we love.”
There is expected to be interest from bidders to buy the business, a source said on Tuesday, but with the current economic uncertainty, it is not clear how many jobs ultimately could be saved.
Deloitte has furloughed 1,800 of the employees under the government Coronavirus Job Retention Scheme, while 41 head office roles will be kept on to help the administrators.
The chains were forced to shut their 92 UK stores because of the coronavirus lockdown.
The group also has 437 concessions in department stores including Debenhams and Selfridges.
Environment ‘Final straw’
Oasis and Warehouse, along with fellow group members The Idle Man and Bastyan Fashions, have gone into administration.
Operations in Ireland, Sweden and worldwide franchise partners are not in administration.
High Street retailers in the UK were facing a tough environment before the crisis, because of rising costs and changes in people’s shopping habits.
But the temporary closure of many shops during the coronavirus pandemic has heaped more pressure on retailers.
Independent retail expert Clare Bailey said retailers had already been under strain for the last two or three years because of the uncertainty surrounding Brexit and its effect on consumer confidence.
“[Coronavirus] was the final straw of all the straws that broke the camel’s already very broken back,” she said.
Some retailers, such as Primark, have opted to cancel orders with their suppliers.
Meanwhile, fashion chain New Look recently informed its suppliers that payment for stock already sitting in its shops or distribution centre would be delayed “indefinitely”.
Last week, department store chain Debenhams, which employs about 22,000 staff, confirmed it had entered administration for the second time in a year.
Its 142 UK stores remain closed in line with government guidance and the firm said it would work to “reopen and trade as many stores as possible” when restrictions end.
At the same time, floral fashion firm Cath Kidston filed for administration, putting 950 jobs at risk.
Kathleen Brooks, founder and director of consultancy Minerva Analysis, said that while a number of retailers had been struggling for some time, “the difference now is there aren’t necessarily buyers to buy them, so in this environment, they may go under.
“They may cease to exist because no one is willing to take a punt on the retail sector, which really seems to be at the epicentre of this coronavirus crisis from an economic point of view.”