British-based music retailer Zavvi has been placed under administration.
Zavvi Ireland is not subject to any formal insolvency proceedings. Zavvi has five stores in Northern Ireland.
More than 3,000 jobs in the UK are at risk at the chain, which was formerly known as Virgin Megastore.
The company called in Ernst & Young after it was crippled by the collapse of Woolworths' Entertainment UK wholesaling division.
EUK was the company's main supplier and its demise last month left Zavvi unable to take customer orders.
Zavvi's woes follow those of tea and coffee merchant Whittard of Chelsea and menswear retailer The Officers Club, which were both put into administration and sold on Tuesday.
Tom Jack, Zavvi's joint administrator, said: 'In the absence of a buyer for EUK, and with dire trading conditions on the high street, the Zavvi group has seen a material fall in sales and the directors have now been forced to place parts of the group into administration.'
E&Y is administrator of Zavvi UK and liquidator of Zavvi Guernsey. The administrator said all Zavvi's 125 stores would open as normal on St Stephen's Day for the post-Christmas sales, while efforts to sell the business as a going concern continued.
'We are grateful for the continued support of all employees during this difficult time and would like to thank everyone at Zavvi for their commitment and hard work as the business continues to trade,' Mr Jack added.
114 stores across UK
Zavvi is Britain's largest independent entertainment retailer, with 114 stores. It employs 2,363 permanent workers and 1,052 temporary staff.
Simon Douglas and Steve Peckham, the group's founders, said: 'We would like to thank all of our employees for their commitment and support since the launch of Zavvi.
'We have done all that is possible to keep the business trading, but the problems encountered with EUK, and particularly its recent failure, has been too much for the business to cope with.'
Earlier this month, 700 workers were made redundant from EUK's head office and distribution centres in Middlesex after administrator Deloitte's efforts to sell the business as a going concern stalled.
EUK will continue operating for the moment with a reduced workforce of 375.
The company's collapse crippled Zavvi's ability to renew its stock during the crucial build-up to Christmas.
Mr Jack said: 'Since EUK went into administration, and perhaps before, the impact of problems at EUK on the Zavvi group has been significant.
'Minimal deliveries, no returns and worse trading terms are just some of the areas impacted.'
Ernst & Young said it believes EUK is unlikely to be sold as a going concern and that Zavvi had faced problems in sourcing products at favourable terms.
'This has resulted in considerable working capital difficulties as a result of the failure of EUK, in addition to continuing operating losses,' it said.
Zavvi was formed from a management buy-out of Virgin Megastore in September 2007 when Sir Richard Branson sold the music chain to Zavvi's chief executive Simon Douglas, reportedly for £1.
According to reports, Virgin Group could become liable for millions of pounds of debt as it has guaranteed Zavvi's orders with EUK. It is understood to have underwritten around 60 days of credit for Zavvi, which ends next month.
No one at Virgin was available to comment and a spokeswoman for Ernst & Young said the administrators were not able to give details of any money owed by Zavvi.
In recent months, the high street has witnessed a swathe of retail failures as companies crumpled under the weight of soaring costs, falling consumer spending and the credit crunch.
The festive selling season - which should be the highlight of the retail calendar - long ago turned into a bloodbath as shops fought tooth and claw to retain market share.
Discounting started weeks early across Britain's high street in an attempt to kick-start consumer spending.
