Debenhams has called in restructuring specialists from KPMG to help look at negotiating reduced rents for its sites and close unprofitable shops as it seeks to revitalise its fortunes, it has been reported.
The department store is in the midst of a turnaround plan and industry insiders say it is looking at options which could include the option of a company voluntary arrangement (CVA) to cut store costs.
The move comes after Debenhams issues three profit warnings this year – while its share price has plummeted by two-thirds since January.
In April it reported an 85 per cent drop in pre-tax profits.
In August it said 80 to 90 jobs at its HQ would go, following a statement months before in February that it was planning to cut 320 store management jobs.
Debenhams is also looking at selling off its Scandinavian department store chain Magazine du Nord for as much as £200 million.
It would be the latest high street retailer to consider a CVA and it comes after House of Fraser entered administration before being bought by Sport Direct’s Mike Ashley – which is also a major Debenhams shareholder.
Richard Lim of Retail Economics said to the BBC : “The fact KPMG have been brought in does not surprise me.
“Debenhams will be wanting to look at all the options open to them.
“The harsh reality is that they are operating in one of the most challenging parts of retailing at the moment.
“Consumers are increasingly shopping online and spending more on things like holidays and the experience economy.”
He added Debenhams is also being “squeezed on costs, with things like increasing rents and business rates and rising wage and utilities bills”.
He added: “It all means that department stores are incredibly expensive to operate.”
Debenhams has 178 stores across the UK, Ireland and Denmark including big stores in Scotland’s major cities plus out of town shopping centres such as Silverburn.