Debenhams PLC (LON:DEB) saw its shares drop on Monday following weekend press reports saying the troubled department stores operator has brought in advisers from KPMG to assess a number of options to improve its fortunes.
The BBC News website reported industry insiders as saying that the firm and KPMG are looking at a number of potential options, including a possible company voluntary arrangement (CVA) - a form of insolvency proceedings that can be used to close stores and renegotiate rents.
READ: Debenhams looking to cut up to 200 more jobs in latest phase of struggling chain’s restructuring plans
The business is also reportedly looking at raising cash by selling off its Scandinavian department store chain Magasin du Nord for as much as £200mln.
In a statement, seen by the BBC, the struggling retailer said: "Like all companies, Debenhams frequently works with different advisers on various projects in the normal course of business.”
Debenhams has issued three profit warnings this year, and has lost two-thirds of its share price value since January, acknowledging that High Street market conditions are "challenging".
In early morning trading, Debenhams shares were down 17.2% at 10.60p.
READ: Sports Direct boss vows to keep bulk of House of Fraser stores open; Debenhams speculation continues
As part of a cost-cutting plan, the firm said in August that 80 to 90 jobs at its headquarters would be shed, having announced in February that it was planning to cut 320 store management jobs.
Sports Direct International PLC (LON:SPD) boss Mike Ashley, who bought department stores rival House of Fraser out of administration last month and who owns just under 30% of Debenhams, is sure to be watching the latest developments closely.
Neil Wilson, chief market analyst at Markets.com, said: “A CVA is being talked about, but given the weakness in the share price and the recent acquisition of House of Fraser, we must consider the possibility that Mike Ashley’s Sports Direct – which has a near 30% stake in DEB - will swoop.
“The rationale for combining the two to create the House of Debenhams is compelling enough. As previously noted, combining the two businesses, reducing overheads and at a stroke removing a key leg of competition, seems like the only viable solution for the two ailing department stores.
"The fact is the market is screaming for restructuring and consolidation looks a sensible route to take given the well documented structural pressures on the sector.”