Mike Ashley's Sports Direct today made a revised £200 million rescue offer for Debenhams, delaying the department store's prospective administration.
The billionaire had an offer to underwrite a £150 million rights issue rejected on Monday.
Lenders to Debenhams said the latest proposal, on the terms set out, including that Mr Ashley be made chief executive of the chain, was "not sufficient".
Debenhams has requested that its shares be suspended from trading with immediate effect, pending a further update.
This afternoon it confirmed it had gone into administration.
Debenhams said in a statement: "The board confirms that it received a revised, highly-conditional, proposal from Sports Direct in the early hours of April 9, which indicated a willingness of Sports Direct to underwrite an equity issue of £200 million.
"The company's lenders have confirmed to the company that the proposal, on the terms set out, was not sufficient to justify an extension to the April 8 deadline.
"The company anticipates making a further announcement during the course of the day following further discussions with its lenders."
The department store has branches in Preston's Fishergate Centre and Blackpool's Houndshill shopping centre, emplopying scores of workers.
Debenhams has already said it plans to shut stores next year to pay off some of its debts. The locations have not yet been revealed.
Debenhams has 165 stores and employs 25,000 people.
Preston Business Improvement District said last year that losing the "anchor store" in the Fishergate Centre would be a major blow.
Professor John Colley, of Warwick Business School, said:"Clearly the bond holders and lenders would much prefer a receivership rather than Mike Ashley in control.
"A receivership allows them to control the assets whereas Mike Ashley would not necessarily be operating in their best interests.
"Mike Ashley knows his shares are now worthless and he is clearly frustrated at the prospect of losing so much money.
He needs someone to blame for his investment and has publicly targeted the Debenhams board. A war of words will not make it any easier to salvage a deal at this late stage."