Sky News has learnt that the board of Toys "R" Us's United Kingdom subsidiary will announce as soon as Monday that it is proposing to launch a process called a company voluntary arrangement (CVA).
Hundreds of staff are set to lose their jobs if the plan goes ahead.
The company is preparing to launch a process called a company voluntary agreement as early as next week, which will require the approval of 75 per cent of its shareholders.
The affected stores will continue trading throughout the Christmas season and on into the new year, said sources, who also confirmed that Alvarez & Marsal, a specialist adviser on corporate insolvencies, would handle the CVA proposal.
It is believed that the larger stores outside towns and cities are most likely to be affected as their performance has been weaker.
It was unclear whether Toys "R" Us's landlords and other creditors would be prepared to back the proposal, further details of which will become clear next week.
In September, the company's USA arm filed for bankruptcy protection in order to restructure debts of £3.7 billion.
However, Toys R Us is now not commenting on the reports, and it is not clear whether its Oxford branch, on Botley Road, could be in the firing line.
The toy giant, which has around 3,000 workers, is looking to move away from its "big-box" out-of-town store model. At the time, the firm insisted that its United Kingdom stores were safe. According to Mail Online, a Toys R Us spokesperson would not comment on the CVA proceedings, shop closures or job losses.