eToys, the US online toy retailer, will shut down its UK operation early in the new year, resulting in the loss of about 90 jobs - if a significant new investor is not found.
Staff at the company's London offices were told of the decision, which comes as part of a drastic cost-cutting plan, earlier this week.
Both eToys' London UK headquarters and customer care centre in Swindon would be closed.
The decision follows eToys' announcement last week that it expects a revenue shortfall of between dollars 90m (pounds 62m) and dollars 100m (pounds 68m) in the third quarter. eToys' US parent recently hired investment firm Goldman Sachs to look at strategic alternatives, thought to include a sale or merger of the company.
eToys' UK operation is expected to continue trading until the end of January. All orders received up to that point will be fulfilled. If no new investor is found, staff will then be made redundant.
It is not known whether key staff, including European marketing director James Bidwell and UK managing director Ruben Rodriguez, have lined up new jobs.
The closure will come as a blow to BMP DDB and The Starcom Motive Partnership, which handle the company's UK advertising and media.