Is Debenhams about to start shutting stores?

DEBENHAMS shares plunged yesterday after consultants were called in to help draft an emergency rescue plan.

The store chain is said to be considering options including a company voluntary agreement – an insolvency procedure used by struggling firms to shut underperforming shops.

The company has brought in KPMG to help draw up the turnaround plans, according to reports.

If Debenhams goes ahead with a CVA, it would join a raft of retailers including New Look, Carpetright and Mothercare, which have opted for the restructuring tool. Landlords say CVAs leave them out of pocket.

The news sent shares down more than 17 per cent in morning trading.

Debenhams insisted it had continued to strengthen its financial position amid ‘volatile market trading conditions’.

‘The market environment remains challenging and underlying trends deteriorated through the summer months,’ said chief executive Sergio Bucher.

‘Nevertheless the product and format improvements we have tested are gaining traction and we are ready to scale up some of our strategic activity.’

Debenhams released a trading report saying its profits would be in line with forecasts.