Debenhams PLC's shares dropped more than 15% to as low as 10.4 pence in London mid-morning trading after reports surfaced that the British department store chain has roped in advisers to explore restructuring plans that may result in closing some of its stores.
A source familiar with the matter told the Financial Times that the company appointed auditing firm KPMG to explore turnaround options, including seeking creditor approval for a company voluntary arrangement, the U.K. equivalent of a bankruptcy protection filing in the U.S.
Debenhams is also in talks with landlords for 30 stores that the company has identified for resizing, the newspaper added.
The news is the latest blow to the U.K. company, which in January announced its £10 million cost-cutting plan that included laying off 320 store managers after it reported weak holiday season sales.
In August, the retailer reportedly launched redundancy consultations under its ongoing restructuring plan, the same month that S&P Global Ratings and Moody's downgraded Debenhams following a further decline in profitability.
Magasin du Nord, the British company's Danish arm, was put up for sale after Debenhams issued its third profit warning for full year 2018, according to earlier reports.
The company's move comes a month after fellow department store chain House of Fraser Group Ltd. went into administration and was acquired by sports apparel retailer Sports Direct.
Debenhams did not immediately respond to S&P Global Market Intelligence's request for comment.
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