Debenhams bosses will axe 20 stores next year as part of efforts to save the ailing business.
It will form part of the 50 closures earmarked for the next three years – although more could be fast tracked under new management.
The department store announced it had gone into administration a fortnight ago leaving more than 25,000 workers fearing their jobs.
Now Sky News says it’s set to launch a company voluntary arrangement (CVA) on Thursday that will pave the way for more than 10% of its outlets to close immediately after Christmas.
It will take the retailer’s total UK estate to 146, while a full 50 closures will leave it with 110 outlets across Britain.
CVAs have become an increasingly common type of insolvency for struggling retailers over the past year, with LK Bennet, House of Fraser and even restaurant chain Giraffe on its books.
The arrangement allows a struggling retailer to restructure to pay off debts without folding. In most cases, it involves closures on the company’s ‘underperforming’ stores.
Debenhams is also expected to seek rent reductions across much of the rest of its estate as part of the deal which will cost more than 1,000 workers their jobs.
The launch of the next phase of the chain’s restructuring comes days after it announced that chief executive Sergio Bucher would step down.
The retailer’s lenders – now made up of high street banks and US hedge funds – have taken control of it and will look to sell the business on, while shareholders have lost their investments.
Debenhams chairman Terry Duddy said: “We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.
“In the meantime, our customers, colleagues, pension holders, suppliers and landlords can be reassured that Debenhams will now be able to move forward on a stable footing.”
A spokesman for the company’s pension schemes said the schemes had been transferred to the newly incorporated company. “Members can therefore be reassured that the schemes are carrying on as usual.”