Around 2,200 staff at JJB Sports, which is based in Wigan, were made redundant today after administrators closed 133 stores and agreed to sell 20 remaining outlets to Mike Ashley's Sports Direct International.
The Sports World parent bought the stores, the brand and its website for £23.8m in a deal that will protect 550 jobs in the UK, including its warehouse.
But the agreement is a worse-than-expected outcome for JJB staff as Sports Direct was reportedly hoping to safeguard up to 1,500 jobs and buy up to 60 stores.
However, David McCorquodale, corporate finance partner at KPMG, who led the sales process, said the level of cash and further operational restructuring required to rescue a more substantial part of the business was too much risk for most interested parties.
JJB's collapse will serve as another blow to the high street after recent high-profile casualties including video games retailer Game Group, fashion chain Peacocks, outdoor specialist Blacks Leisure and Clinton Cards.
The JJB name will vanish from the high street as Sports Direct intends to convert all stores as part of the deal, in which it also acquired all of the company's stock and the Slazenger Golf brand.
Brian Green, David Costley-Wood and Richard Fleming, partners of KPMG LLP, were appointed as administrators of the company.
KPMG said the net proceeds of the sale will be used to repay the company's outstanding debt to its lender and other secured creditors and it confirmed that shareholders interests would be wiped out.
The group had already warned investors - who include the Bill and Melinda Gates Foundation - that they were likely to see their stakes lost under any rescue deal.
Mr Fleming, UK head of restructuring at KPMG, said it was unfortunate that a buyer could only be found for 20 stores.
Staff made redundant as a result of store closures have had their arrears of wages and holiday entitlements paid in full, he added.
Wigan-based JJB put itself up for sale at the end of last month after failing to secure the funds needed to overhaul its stores.
JJB secured its most recent lifeline four months ago when it landed £20m from US retailer Dick's Sporting Goods and a further £10m from existing shareholders.
The group earmarked £20m of the most recent funding on converting 60 of its most important stores in 2012 and 2013 into a new format which during trials produced much-improved sales and margins.
More dire trading despite the UK's summer of sport left the stricken firm asking shareholders for another cash injection, but this time they ran out of patience, finally forcing the group to throw in the towel and put itself up for sale.