Debenhams set to close all stores with possible loss of 12,000 jobs

© Provided by The Guardian Photograph: Danny Lawson/PA

Debenhams is set to wind down the business and close all 124 stores after JD Sports ended discussions over a rescue deal for the struggling department store chain.

Administrators to Debenhams, which has been seeking a buyer since the summer, said the sale process had “not resulted in a deliverable proposal”. This means all 12,000 employees are likely to lose their jobs.

They will continue to seek a buyer while stores will remain open to sell off remaining stock. If no buyer is found once that stock is sold, the stores will close.

Related: JD Sports pulls out of Debenhams rescue talks after Arcadia’s collapse – business live

Geoff Rowley of FRP Advisory, the joint administrator to Debenhams, said: “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 UK retail industry, a viable deal could not be reached.

© Photograph: Danny Lawson/PA Debenhams’ 124 department stores are to close after the chain went into liquidation.

“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.”

Talks with JD ended after Debenhams’ major supplier Arcadia collapsed into administration on Monday, and it is understood that the uncertain future of the group, which owns Topshop and Burton, played a major part in the decision.

JD confirmed the decision on Tuesday morning in a statement which said “discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated.”.

Debenhams, which employs about 12,000 people and operates 124 shops, has been considering a potential sale since the summer after it went into administration in April for the second time in a year.

With the exit of JD Sports, the only remaining suitor likely to take on a significant number of stores is Mike Ashley’s Frasers Group.

Ashley has made no secret of his interest in the ailing department store despite seeing a £150m stake he built up in the then-listed company wiped out last year in a debt restructuring deal with the department store’s lenders.

However, Ashley’s offers for the business have so far not exceeded half of the £300m hoped for by its owners.