The British department store chain Debenhams is winding down operations and closing all 124 shops with 12,000 potential job losses after JD Sports Fashion ended talks about a rescue deal.

Administrators have been trying to sell the troubled 232-year-old group since April, but have admitted that the sale process has “not resulted in a deliverable proposal.”

The collapse came within hours of Philip Green’s Arcadia Group - the owner of Topshop, Dorothy Perkins, Miss Selfridge, Burton, Wallis, Evans, Topman and Outfit - entering administration, threatening a further 13,000 jobs.

Arcadia was the biggest concession retail holder in Debenhams stores, triggering JD Sports’ decision to pull out of discussions, as it issued a short statement that talks had been “terminated”.

Stores will remain open to offload remaining stock while efforts to find a buyer for all or part of the chain continue, Debenhams stressed, adding that the deal does not affect its Magasin du Nord in Denmark, which continues to operate independently. Debenhams started the liquidation of its Irish, Hong Kong and Bangladesh businesses in April.

”Given the current trading environment and the likely prolonged effects of the Covid-19 pandemic, the outlook for a restructured operation is highly uncertain. The administrators have therefore regretfully concluded that they should commence a wind-down of Debenhams UK, whilst continuing to seek offers for all or parts of the business,” Debenhams said.

Geoff Rowley of FRP Advisory, joint administrator to Debenhams, said that “all reasonable steps were taken to complete a transaction that would secure the future of Debenhams. However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the U.K. retail industry, a viable deal could not be reached.”

“The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.”

Rowley added that contracts with landlords, suppliers and partners “entered into in the administration period will be met in full.”

With JD Sports out of the running, Mike Ashley’Frasers Group has emerged as a potential buyer for Debenhams, according to Michael Hewson, chief markets analyst at CMC Markets.

“Mike Ashley has never hidden his desire in trying to get his hands on the group, only to be thwarted at various turns. With 12,000 Debenhams staff set to lose their jobs in the event of no rescue, you would think that something might be agreed, even if it meant that only some of the jobs could be saved,” he said.

Analysts at Shore Capital said Frasers could be “potentially looking at acquiring pockets of stock and certain stores” as well as Debenhams’ house brands Maine and Mantaray. Ashley built a £150 million ($200m - €166m) stake in the then-listed Debenhams, only to see it wiped out last year in a debt restructuring deal with the department store’s lenders.

The business landscape for both Debenhams and Arcadia was already bleak before the Covid-19 pandemic. Neither brand had developed an online offering and were surrendering market share to newer challengers such as Boohoo.  Once coronavirus lockdowns forced the shuttering of businesses deemed to be “non-essential,” those chains without an e-commerce channel were forced to take a massive hit on sales.

The whole British retail industry is suffering a deep crisis that has been aggravated by Covid-19 related lockdowns. According to the Centre for Retail Research 20,622 stores will close this year, compared with 16,073 in 2019, and job losses will rise to 235,704 from 143,128 last year.

The ailments afflicting physical stores are high costs, including rents, taxes and high labor costs; low profitability caused by high costs and slow growth in sales; rapid growth in online competition and a lack of preparation, resulting from low investment in stores and ”weak forward planning to meet the challenges of the new retailing,” according to the Centre for Retail Research.