The DVD specialist, which will continue to trade as normal, is working with administrator Kroll to find a buyer for the business. Kroll has appointed Andrew Pepper and Peter Saville as joint administrators to Silverscreen.
It is believed the specialist approached Virgin on Monday to hold off the 65-strong chain's collapse, but Silverscreen's efforts were fruitless.
The retailer is a victim of a tough market hit by fierce competition from free product given away with papers, supermarkets and pirated goods.
Pepper said: 'Silverscreen is a unique business as the UK's only DVD specialist retailer, which has unfortunately suffered because of the rapidly evolving marketplace, which is seeing technology offering alternative and cheaper options to the traditional DVD.
'We have already commenced negotiations with a number of interested parties and are confident that we will find a buyer for the business. The company's suppliers have expressed their support and the stores remain well-stocked and open for business,' Pepper added.
The specialist announced last month it would dispose of eight underperforming stores to rationalise its portfolio.
Silverscreen, which employs 550 staff, was formed in 2003 to take advantage of the growing DVD market. Apax ploughed more than£20 million into the business to fund its expansion.
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