Debenhams’ owners have begun contingency planning for the future of the 242 year-old department store chain, including plans for a potential liquidation.

The retailer, which has already cut more than 4,000 jobs since the beginning of the Coronavirus pandemic - including 2,500 last week - has said that its remaining 124 stores have been trading strongly since re-opening.

The department store chain, which fell into administration for a second time in April, was already facing tough trading conditions before non-essential stores were forced to close for the lockdown.

However, as part of contingency planning to safeguard the future of the company in the run up to Christmas trading, restructuring specialist Hilco Capital has been brought in to draw up plans in case a possible sale of the company results in failure.

In this scenario, Debenhams’ stock and assets would be liquidated, putting the jobs of 14,000 staff at risk.

However, in a statement Debenhams insisted that the appointment of Hilco was a requirement of the administration process and does not mean the liquidation of the business is likely to happen, rather it is a contingency plan in the “unlikely” event that other avenues to rescue the business.

A spokesman for Debenhams said: “Debenhams is trading strongly, with 124 stores reopened and a healthy cash position - as a result, and as previously stated, the administrators have initiated a process to assess ways for the business to exit its protective administration.

“The administrators have appointed advisors to help them assess the full range of possible outcomes which include the current owners retaining the business, potential new joint venture arrangements (with existing and potential new investors) or a sale to a third party.”

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