Electricals chain Comet is to be placed into administration next week in a move putting around 6,500 jobs under threat and marking one of the biggest high street casualties in recent years.
The chain said it was "urgently working" on plans to secure the company's future and has lined up restructuring specialist Deloitte to handle the administration. It is expected that administrators will seek a buyer for the business, which has 240 stores across the UK.
Jon Copestake, retail analyst at the Economist Intelligence Unit, said Comet's troubles "come as little surprise". He added: "Not only has Comet faced deflationary pressures thanks to stiff competition and cheaper production costs, but core audio visual products are being undermined by combined platforms on smartphones and tablet computers."
Customers with outstanding orders and those with gift cards and vouchers are being told it is "business as usual until further notice" and that the group intends to fulfil deliveries of products that have been paid for.
Glynn Mummery, partner at restructuring firm FRP Advisory, said Comet's administration was the latest sign of an embattled UK retail sector, which has been struggling amid a slump in consumer spending. He warned: "This is a fair barometer of weakening retailer confidence in the mainstream high street for the months ahead."
The administration is among the biggest since the demise of Woolworths in 2008 and comes a month after the failure of JJB Sports. Other recent casualties have included Clinton Cards, Blacks Leisure, Game and Peacocks.
The move raises the prospect of a pre-Christmas rush for discounted stock, with the administrator expected to wind down supplies and raise cash for creditors.
News of the planned administration comes just months after Comet was taken over by investment firm OpCapita, which bought the chain for a nominal £2 in February. It is thought OpCapita and recently-appointed chairman John Clare - the former boss of rival Dixons - had been unable to secure the trade credit insurance needed to safeguard suppliers.
Rivals are expected to benefit from Comet's woes and the news sent shares in PC World and Currys parent Dixons Retail soaring by 13%, while Argos parent Home Retail Group rose 4%.
The high street electricals market in the UK has come under huge pressure as cash-strapped shoppers put off purchases of big-ticket items such as TVs and large appliances and online rivals take a bigger slice of the sector. America's Best Buy recently pulled the plug on 11 giant electrical stores after failing to make inroads into the UK market.