Toys R Us could end up in administration tomorrow putting 3,200 jobs at risk.
The chain is seeking potential buyers in Europe hours before it plans to put UK stores into administration, according to Sky News.
According to reports, Hilco Capital known for saving HMV and Alteri Investors, ended talks to take on the brand.
The retailer is struggling to pay off a £15 million VAT bill due to weak Christmas trading.
Before Christmas it had hoped to stave-off the threat of administration after it struck a deal with UK's pension lifeboat to plug a £9-million blackhole.
According to sources, that spoke to Sky News, the directors of the UK's biggest toy retailer will likely appoint administrators tomorrow, putting over 3,000 jobs at risk.
The retailer has until 27 February to pay off the bills but the source said future of the retailer is not looking hopeful.
Under the firm's Company Voluntary Agreement (CVA) agreement, it had announced that it would close 25 of its 106 stores across the country this spring leaving 800 people without a job.
In the event, the retail giant fails to avoid administration, the number of job losses could rise to 3,200. The company has not yet confirmed what will happen to the employees.
Also recovery firm Moorsfields is said to be on standby to handle the administration process.
Further, the Pension Protection Fund lifeboat (PPF) has been warned that the retailer's 600-member retirement scheme would likely fall into their hands, which could mean cuts to savers' benefits.
According to insiders, the situation is bleak after potential buyers Hilco Capital, and Alteri Investors pulled out of talks due to the complexity of the turnaround job needed.