The first store shut down in 2015 after 39 years in the city's Lakeview neighborhood. It re-opened last year in a smaller space.
But owner Mark Thomas said he expects to close the week of Halloween, due to ongoing health issues.
"This is not the end of The Alley, as we will continue our legacy 'online,'" Thomas said in a release Tuesday. "I will continue to search for a younger, healthier partner to carry on this strong, loved brand, hopefully in brick and mortar retail."