The firm's British shops originally fell victim to increased competition from supermarkets, the shift towards people watching films over the internet and a harsh economic backdrop.
Gordon Brothers Europe, which purchased Blockbuster for an undisclosed sum in March, said on Tuesday it was filing a notice of intention to appoint an administrator to the retailer, which trades from 264 stores and employs 2,000.
The firm said it had striven to turnaround the historically loss-making company by restructuring the business, investing in marketing activities and negotiating with the landlords of its retail outlets.
Gordon Brothers said it had also tried to develop a new digital platform but was unable to broker a licensing deal with Blockbuster UK's parent company in the United States.
"Regrettably, the months since the acquisition have also coincided with a period of poor trading performance across both rental and retail sales," it said, adding that the need to reduce costs whilst a buyer is sought will result in 32 redundancies at Blockbuster UK's head office.
All stores will continue to trade whilst a buyer is sought for the business.
Several British retailers collapsed in the economic downturn, including Woolworths, Comet, HMV and Jessops. (Reporting by James Davey; editing by Rhys Jones)
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