Debenham’s have begun drawing up plans for the liquidation of the department store chain, Sky News reports.

The department store chain is preparing contingency plans for its possible liquidation, which could pose as bad news for the remaining stores open.

Debenhams has already axed more than 4,000 jobs since the coronavirus pandemic struck, which even resulted in the permanent closure of the flagship store in intu Watford.

The Watford store only opened in September 2018 as part of the £180 million extension at intu but the store was forced to shut after Debenhams has been in administration since April.

Sky News reports that Debenhams has appointed Hilco Capital in the event that a sale process fails for the retailer.

Hilco is said to be “contingency planning” this weekend as it seeks to secure its future ahead of the pre-Christmas trading period.

Some parties have expressed interest to act as a buyer, but analysts believe it is unlikely a buyer will emerge for Debenhams in its current form.

Debenhams declined to discuss the involvement of Hilco, but the group worked with Debenhams on the permanent closure of 18 stores this year.

In a statement a spokesman for the department store chain said: "Debenhams is trading strongly, with 124 stores reopened and a healthy cash position.

"As a result, and as previously stated, the administrators of Debenhams Retail Ltd 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."