About 700 people will lose their jobs after it was confirmed Toys 'R' Us and Babies 'R' Us stores around Australia will be shut down.

Administrators failed to secure a buyer for the chain of 44 toys and baby goods stores, which have been trading since entering voluntary administration in May.

Stock will now be liquidated through sales at existing stores before they close in coming weeks.

The Toys 'R' Us online ordering system will be closed on Friday morning, with open online orders "to be delivered to customers where goods have been paid for in full and the stock is available", administrators McGrathNicol said.

Customers who have gift cards will be able to use them until July 5 — as long as they spend "an additional equivalent amount", McGrathNicol said.

"In other words, to utilise a $100 gift card in full, customers must spend at least an additional $100 in store," the administrator said.

Lay-bys will also be honoured until July 5, "provided the outstanding balance is paid and the stock is available", it said.

'Being a simple shop for toys not enough to compete'

It follows the collapse of United States Toys 'R' Us stores in March, when it announced it was preparing to sell or close all 735 stores in the country, putting 33,000 jobs at risk.

The toy retailer's UK stores were also slated to close, with joint administrators for the retailer unable to find a buyer for all or part of the business.

IBISWorld industry analysts said the company's failure could be blamed on "intense internal and external competition".

"While demand for toys and games remains high, consumers have moved online or to discount department stores," IBISWorld industry analysts said.

"Toy and game retailers have long been warned that being a simple shop for toys would not be enough to compete, and Toys 'R' Us was not able to adapt fast enough to changing market conditions.

"The company's stores failed to attract busy parents, many of whom purchased toys from stores such as Kmart while shopping for other necessities."