Blockbuster, the DVD rental shop, has collapsed into administration, delivering another blow to Britain’s high streets and putting 4,190 jobs at risk.
The US-backed company is the third major retailer to go into administration in less than a week following the failures of HMV and Jessops.
Together, the retailers employed 10,330 staff and have almost 1,000 stores in the UK.
Britain is now on course for a record number of store closures this month — more than the 807 that closed due to the demise of Woolworths in January 2009, according to the Local Data Company, which measures the number of empty shops on the high street.
Administrators Deloitte said it had already had three expressions of interest in Blockbuster.
Lee Manning, joint administrator and partner at Deloitte, said Blockbuster’s 528 stores will remain open as the administrators try to find a bidder to rescue the business.
Deloitte will also honour Blockbuster gift vouchers after a customer backlash against HMV for its refusal to accept vouchers.
Mr Manning said he hoped that up to 70pc of the company’s portfolio can be rescued. “We want to preserve a viable core that has not been damaged in anyway,” he said.
Blockbuster UK has no secured creditor but owes its US parent £23m, which includes unpaid royalty fees. It also has £90m in unexpired leases outstanding.
The company still has 2m rental customers and in the final quarter of 2012 it was hoping to generate £4.3m in earnings.
However, instead it only broke even, meaning it did not have the funds to press ahead with a company voluntary arrangement, which would have allowed it to exit loss-making stores.
“The company just reached the point of no return,” said Mr Manning. “After this it risked more and more asset erosion.”
Blockbuster opened its first store in south London in 1989. Despite having 2m customers it managed to transfer only 35,000 across to online.
In 2010 the US parent went bankrupt and was rescued by Dish Network.
“A loss of around £10m a year is not sustainable,” said one insider. “The company simply could not go on.”
Like many retailers, Blockbuster has struggled to keep up with online competition and failed to adapt quickly enough to changing consumer habits.
In recent years sales have slumped dramatically, with the company moving from a £1.7m profit in 2010 to a £8.4m loss in 2011 and a £11.2m loss last year.