The company, which has Royal Warrants to its name, is to be run by receivers from accountant KPMG while they seek a buyer. It employs 300 staff and operates from a head office in central London and a manufacturing base in Basildon, Essex.
Its fall comes after a year of trying to shake off its old- fashioned image and trying to reinvent itself. The group was desperately trying to remove itself from the old lace and lavender image promoted for more than two centuries.
Founded in 1770, the company - which supplies cosmetics and perfumes to the Royal Family - last year swapped its model from English rose actress Helena Bonham Carter to supermodel Linda Evangelista.
As the legions of elderly women who were the traditional mainstay of the business started to die off, it was forced to go head to head with the highly competitive designer cosmetics companies for the younger market.
A racy new advertising campaign swapped the Olde English image of the company for that of Ms Evangelista shackled in chains and handcuffs.
At the time, chief executive Richard Finn said: "The English Rose image was a digression. In the Sixties, Yardley was associated with Twiggy, Carnaby Street and mini skirts, not stuck in a cottage garden with green wellies."
The company tried to meet head-on the cosmetics produced by new, younger labels such as Tommy Hilfiger, Calvin Klein and Donna Karan.
Its range of traditional perfumes, talcum powders and body lotions using lavender, English rose and spring flower, which have been favourites for generations, was expanded to encompass more funky cosmetics with brightly coloured lipsticks and nail varnishes.
But the revamp attempts were not without pitfalls: images of a semi-naked supermodel chained in a cell were feared to have affected sales among customers in the Middle East. Clientele in those countries were enthusiastic purchasers of Yardley's decorous Olde English look.
But yesterday's decision by the banks who back the company shows that the move either came too late or was simply misconceived.
Administrator Tony Thompson said the group has debts of pounds 120 million and had considered closing the Basildon factory to buy products elsewhere. "Our first priority as receivers is to quickly take control of Yardley's businesses and its assets," he said.
A spokesman for the Royal Warrant Holders' Association said: "If a company goes into receivership it must inform the Lord Chamberlain's office and its Royal Warrants may be reviewed.
"Royal Warrants cannot be bought or sold, they are appointed to a company and are reviewed every 10 years."