Debenhams has called in accountancy firm KPMG as it considers a restructuring process to help stem losses.

The embattled department store chain, which has seen its share price plummet by two thirds since the start of the year, is understood to be drawing up a series of contingency plans, including a possible Company Voluntary Arrangement (CVA).

The CVA process allows a company to close stores and renegotiate rents on properties.

The move comes on the back of a year of financial challenges for Debenhams, with three profit warnings issued as it battles the decline in High Street footfall and a rapid growth in e-commerce.

In February, the firm slashed 320 store management roles and is expected to consider further changes as it faces a drop in profits from city forecasts of £50.3 million to between £35 million and £40 million.

Last month House of Fraser, a rival department store chain, entered into a CVA after it was sold to Mike Ashley, owner of Sports Direct, for £90 million.

As part of plans to raise extra cash for its UK business, the firm is also considering the sale of Magasin du Nord, its Scandinavian department store.

In a statement issued on Monday afternoon, Sergio Bucher, chief executive of Debenhams, commented:“The market environment remains challenging and underlying trends deteriorated through the summer months. Nevertheless the product and format improvements we have tested are gaining traction and we are ready to scale up some of our strategic activity ahead of peak."

A spokesperson for Debenhams said: “Like all companies, Debenhams frequently works with different advisors on various projects in the normal course of business.”

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