Citing a "catastrophic Christmas and summer" which included more than $3 million worth of holiday stock delayed due to quarantines, the company - which has a Ballarat store in Bridge Mall - said it did not have any other choice.

"We've been flat out working on solutions to protect staff, suppliers, landlords and creditors," ISHKA owner Toby Darvall said in a statement.

"We've done everything and explored every option we could to save the business and we are working very closely with our bank. This is a heartbreaking decision to make.

"We have taken the unusual step for a privately-run family company to speak out during this difficult time."

The news comes as other retailers such as Harris Scarfe, EB Games and Jeanswest have fallen victim to tough market conditions amid "online pressure".

Rumours were swirling in May last year when "closing down" signs went up across many ISHKA stores, including Ballarat and Warrnambool.

An ISHKA customer support representative said at the time there was a 50-50 chance of the store closing.

"It could close down, it could not," he said.

The chain, which has been in business for almost five decades after starting in Melbourne suburb Glen Iris, sells handmade crafts, homewares, gifts, clothing, furniture and jewellery,

"We want our staff, our makers and our suppliers to know we are here to help and support them," Mr Darvall said.

"We know the ripple effect an event like this can have on hundreds of families and communities involved in the company."

All 60 stores - including 15 in the 'country' - will remain open, at this stage.

"We want our staff, makers and suppliers to know that they will be paid regardless of the outcome. They are our number one priority," Mr Darvall said.

"We are now in for the fight of our lives to save ISHKA."

Cor Cordis' Rachel Burdett has been appointed administrator of the business, and will convene a meeting of creditors within a week.

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