Printing and publishing industry group PaperlinX has all but given up on its UK business, placing most of it in administration.
The Australia-based company, Britain's biggest paper merchant, blamed the poor performance of the UK business when it slumped to a $28.4 million first half loss in February.
Administrators Deloitte were appointed and immediately shut 14 of 19 sites overnight, leading to up to 693 job losses.
Plunging margins and demand for paper and falling margins in the age of digital communications have contributed to its woes, as it tries to expand into sign and display products and packaging.
The company also possibly breached the terms of a loan, which it has not confirmed, and is struggling with a large deficit in legacy pension liabilities and the withdrawal of credit insurance.
The decision comes a month after chief executive Andrew Price was sacked and replaced with Australian boss Andy Preece and a strategic review was started in December.
The company's shares went into a trading halt at 1.7 cents last Friday, having started the year at 4.2 cents.
The closures and possible collapse if Deloitte can't find a buyer or buyers for the business, could have large ramifications for the UK print industry and its ability to source paper.
The company's Spicers Australian operations and businesses were unaffected, profitable and operating normally, said PaperlinX.
Mr Preece said in a statement after exploring options including selling part or all of its European operations, the board decided there was no reasonable prospect of a financial improvement in the UK Group.
"PaperlinX has strongly supported its UK operations for many years, but despite continued efforts and the investment of significant capital over recent years, it has not been possible to successfully restructure the UK Group," he said.
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