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Reuters
Debenhams is currently exploring a Voluntary Enterprise Agreement (CVA) that could allow the closure of about 20 of its department stores this year.
The company is in talks with its banks to increase its borrowings before the payment of the quarterly rent due on March 25th.
A CVA would allow Debenhams to renegotiate its lease rates with the owners and expedite the closure plans of the stores.
Debenhams declined to comment.
It is understood that the company lacks leeway over its £ 520 million loan facilities from its banks.
Debenhams announced in October that it is expanding its plans to close 10 to 50 stores – putting 4,000 jobs at risk – over a period of three to five years.
However, as part of a CVA, closures would be accelerated and 20 stores could be closed in 2019.
It should inform shareholders of its progress in the coming weeks.
Debenhams has 165 stores and employs approximately 25,000 people.
Sergio Bucher was recently dismissed from Debenhams' board of directors but remains as managing director
High Street retailers are under increasing pressure as more and more people choose to shop online and shop less.
Debenhams reported a pre-tax record loss of £ 491.5 million last year and, more recently, said sales had fallen sharply at Christmas.
Last year, House of Fraser fell into the administration before Mike Ashley, the founder of Billionaire Sports Direct, bought the department store's badets for £ 90m.
Mr. Ashley is also one of the largest shareholders of Debenhams, with a 29% interest. He recently partnered with the Landmark Group investor to elect the president and general manager of the retailer's board of directors.
Sergio Bucher continues to badume the duties of Chief Executive Officer of Debenhams, but will no longer sit on the Board of Directors while Sir Ian Cheshire immediately resigns as Chairman.
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