Toys 'R' Us will close or sell all its 885 stores in the US after failing to find a buyer, putting about 30,000 jobs under threat.
Chief executive Dave Brandon said it was a profoundly sad day for the retailer.
The giant toy-store chain was already in the process of closing one fifth of its shops after filing for bankruptcy protection last year.
Toys 'R' Us will also close all its UK stores by the end of April.
The UK collapse will put more than 3,000 people out of work as a dismal period for the retail sector continues.