Powerhouse, the UK's third biggest electrical retailer, has been put into administrative receivership, putting 3,000 jobs on the line.
Profits at the retailer have fallen
The firm is now protected from its creditors while the administrators, Deloitte & Touche, try to find a buyer.
If they are unsuccessful, the company, which has its headquarters in Bicester, Oxfordshire, will have to shut down.
For the moment, though, more than 800 people are to be made redundant immediately as 93 of its 223 stores will close.
Powerhouse has not yet said which shops will be closing.
Deloitte & Touche said: "The company has already taken the decision to close 93 of its 223 stores, and the remainder will continue to trade as we try to find a buyer."
The group added that the move would result in 813 redundancies - more than 600 at superstores and the rest at High Street shops. It has not been confirmed which shops will close.
The move followed the news that a leading trade insurer had told some suppliers it would no longer guarantee their payments from Powerhouse because it had doubts about the company's finances.
Last year, its profits fell to £300,000 on a turnover of £384m.
The company was formed from the loss-making retail arms of three regional electricity companies and was owned by Hanson before being bought by its management in 1996.
In 2001, Powerhouse took over 98 of Scottish Power's retail stores to become the country's third largest electrical retailer behind Comet and Dixons.
And in March 2002, the company announced it was taking up concessions in Homebase stores as part of an "ambitious growth programme".
But with Powerhouse in trouble, its two biggest competitors found themselves popular with investors.
Shares in both Dixons, which owns the Currys chain, and Comet owner Kesa rose as analysts speculated that the loss of Powerhouse would mean better returns for the remaining players.
Neither is thought to be likely to bid for Powerhouse, not least because of store overlaps.
But Argos, the catalogue chain owned by GUS, is being tipped as a potential buyer - although perhaps not as a going concern.