The decision came after the lockdown closure of non-essential retail wiped out trade for two consecutive easter and Christmas periods.
The company, which was bought by Ferrero International in 2015, will maintain production at its factory in Alfreton, Derbyshire, but retail will shift entirely online.
Retail director Adam Goddard 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.
“We will now go into full consultation with our colleagues.”
Ferrero International bought the company in 2015 for £110m and invested £40m in manufacturing, retail, e-commerce. But last year, Thorntons reported a 9.5 per cent drop in sales to £122.3m and a pre-tax loss of £35m.
Goddard said online sales were up 71 per cent over the last 12 months.
He added: “We are continuing on our journey to produce more assortment products for the international market – the first being our Golden Gallery collection now available in the USA and Canada.
“We remain committed to our iconic Thorntons brand and will continue to invest further in the future potential to ensure we evolve with the times.”
The company was founded by Joseph Thornton in 1911, selling homemade sweets from a shop at in Sheffield.