Struggling retailer Debenhams could axe 20 stores this year

Struggling department store chain Debenhams could begin a closure programme at its stores, with up to 20 at risk this year, according to reports.

The BBC is claiming that the embattled retailer is exploring a company voluntary arrangement (CVA) and is in talks with its banks to increase borrowings ahead of a quarterly rent payment which is due on March 25.

Debenhams is understood to be close to its existing £520m borrowing facilities.

Debenhams is the latest in a long line of retailers to have been hit by a slowdown in spending and a change in consumer habits.

House of Fraser, Mothercare and New Look are just some of the big names to have fallen foul of the slump on the High Street.

The company operates flagship stores on Manchester’s Market Street, in the Liverpool One shopping centre, at the Golden Square shopping centre in Warrington, and Stockport’s Merseyway Shopping Centre.

Entering into a CVA would allow the firm to renegotiate rental rates with landlords, as well as speed up plans to shut shops.

Last October Debenhams confirmed that it would increase store closure plans from 10 locations to 50, which would put up to 4,000 jobs at risk.

It proposed to carry out its closure programme over three to five years.

But a CVA would mean its closure plans could be accelerated and up to 20 stores could shut this year.

Debenhams has 165 stores and employs around 25,000 people.

The group reported a record pre-tax loss of £491.5m last year and more recently said sales had fallen sharply over Christmas.

Debenhams declined to comment.