The retailer said it has been hit hard by the pandemic, which has kept many of its stores shut for key periods around Christmas and Easter.
It said it has seen sales surge online and will invest in its grocery supply business as part of the shake-up of its operations.
The company, which was founded in Sheffield in 1911, was bought by Italian food giant Ferrero in 2015 for £112 million.
Thorntons said it pumped £45 million into transforming its operations, including new-format stores and cafes, but saw its turnaround plan thrown off course by the pandemic.
Ferrero said it will continue to invest in the business and hopes to grow its international supply business from its Alfreton factory.
The collapse of the store business is the latest high-profile failure on the UK high street.
New figures from PwC revealed this weekend that more than 17,500 chain store outlets disappeared from high streets last year.
Adam Goddard, retail director at Thorntons, said: "Changing dynamics of the high street, shifting customer behaviour to online, the ongoing impact of Covid-19 and the numerous lockdown restrictions over the last year - especially during our key trading periods at Easter and Christmas - has meant we have been trading in the most challenging circumstances.
"Unfortunately, like many others, the obstacles we have faced and will continue to face on the high street are too severe and despite our best efforts we have taken the difficult decision to permanently close our retail store estate."