Poundworld has collapsed into administration, putting more than 5,000 jobs at risk, following the failure of rescue talks over the weekend.
Deloitte is expected to be appointed to oversee the administration.
Grainger Games on Eagles Meadow closed earlier this year due to entering administration.
Clare Boardman, joint administrator of Poundworld, said that the chain had been affected by the "challenging" retail environment.
She said the business was hit by falling footfall, alongside rising costs and weak consumer confidence.
Talks with a potential buyer R Capital have collapsed meaning that the owner TPG felt it had no option but to put the company into administration.
Deloitte will try to find a buyer for the business, and has said there are no redundancies or store closures at this time.
Other parties named as possible buyers were turnaround specialist Alteri Investors and Poundworld's founder Chris Edwards.
Poundworld has been losing money for the past two years.
Poundworld has around 350 stores across the United Kingdom, including branches at Bloxwich, the intu Merry Hill shopping centre in Brierley Hill, Hednesford, Lichfield, on the Reedswood Retail Park in Walsall, in Stafford and West Bromwich and two in Wolverhampton.
Poundworld's losses widened in 2016-17 to £17.1m, from £5.4m of losses the year before.
House of Fraser is seeking landlord approval for the restructuring plan, which is a form of insolvency known as a Company Voluntary Agreement (CVA).
Others undertaking CVAs include New Look, Mothercare and Carpetrights.