High street chain Debenhams has sought help from advisers KPMG as the firm looks to improve its fortunes.
It’s being reported that KPMG is investigating turnround options that may also include a compulsory voluntary arrangement, a form of insolvency proceedings that can be used to close stores and renegotiate rents.
Earlier this year, Debenhams posted a profits tumble of 85%, which it blamed on the adverse weather conditions experienced throughout the UK.
The department store chain, whose shares dropped 17% with the news this morning, is in the midst of cutting costs with flash sales and as the firm said in August 80 to 90 jobs at its headquarters would be shed.
A statement from Debenhams said: “Like all companies, Debenhams frequently works with different advisers on various projects in the normal course of business.”
Following on from House of Fraser falling into administration last month and its subsequent sale to Mike Ashley’s Sports Direct – who holds 30% in Debenhams.
The decision by Debenhams heightens concerns that the UK high street is in collapse following a list of closures in the past year.
Analysis: Laith Khalaf, Senior Analyst, Hargreaves Lansdown
Debenhams is one of the most shorted shares on the stock market, and its suppliers have had difficulty getting insurance for their stock, which shows there is a lack of confidence about Debenham’s future. The retailer is struggling to make ends meet with a large store estate in a market which is increasingly digital and constrained by a challenging environment for consumers.