Woolworths will hold a closing down sale tomorrow after administrators failed to find a buyer for the company's 813-store retail chain.

Deloitte, the administrator of the store, announced this evening that although negotiations are ongoing it would close the chain, which fell into administration last month.

The administrator made the announcement after informing Woolworths' staff. The closure of the stores makes mass redundancies likely. The group employs 30,000 people, approximately 25,000 of whom work in the retail arm.

Neville Kahn, the administrator, said: “We continue to make every effort to convert interest in the Woolworths assets into firm offers. While we are still seeking bids from interested parties, Christmas is clearly the busiest time of the year for retailers and it is prudent to do all we can to sell existing stock. By moving to a store closing sale and further discounting the stock, we are maximising the sales potential that this period offers.”

Deloitte said today that some stores would be forced to close before the end of December if an offer fails to arrive.

Woolworths is already holding a fire sale, which raised £25 million last Friday alone. The prospect of even more stock being dumped on the high street in the run-up to Christmas will worry the already struggling retail sector.

A host of buyers had expressed an interest in buying Woolworths as a going concern since The Times revealed last month that Hilco, the turnaround specialists, were negotiating to buy the indebted group for £1.

Sir Geoff Mulcahy, the former boss of Woolworths, was the latest name to be linked with an acquisition. Theo Paphitis, the Dragon's Den entrepreneur, and Ardeshir Naghshineh, the Iranian property magnate who is Woolworths' biggest shareholder, had been in separate talks that failed to result in an offer.

Hundreds of Woolworths high street sites will prove attractive for retailers. Iceland and Poundland have already expressed an interest in taking over some of the leases.

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