Outdoor clothing firm Blacks has called in administrators to its 11 O'Neill boardwear stores - threatening 90 jobs.
Blacks said there was "no reasonable prospect" of restoring loss-making Sandcity - its subsidiary which owns the stores - to profit.
Administrator KPMG said the leisure market had been "affected profoundly" by the recession.
On Tuesday Blacks warned that it would breach its bank lending terms after worse-than-expected trading.
Its bank, Lloyds, has said it would waive the breach of its covenants until November if Blacks gets an approved turnaround plan in place.
The "ongoing prospects of the group will be uncertain", without the bank's leniency, Blacks warned.
The O'Neill stores are in Birmingham, York, Glasgow, Milton Keynes, Sheffield, Bristol, Brighton, Leeds, Bluewater in Kent, and two in Manchester.
Blacks also has 32 Freespirit stores, which continue to trade and are unaffected.
The company currently has 256 Millets stores and and 116 Blacks Outdoor outlets.
Blacks' original plan was to convert its boardwear stores into branches of either Blacks or Millets.
However it has been reported that the bank was unhappy with this solution, and had demanded more radical approach.