Debenhams ‘shake-up’ claims sparks fears for jobs at firm’s bases in Portsmouth and Fareham

The retailer is preparing documents for a company voluntary arrangement (CVA), a type of insolvency procedure which could help it reduce rents and shutter underperforming stores, according to the Financial Times.

The move is expected in the next few weeks, as the chain approaches the quarterly rent due date in March.

The claim has raised question marks over the futures of its bases in Portsmouth’s Commercial Road and Southsea’s Palmerston Road, as well as that of the firm’s outlet in Osborn Road, Fareham.

The retail chain declined to comment on the situation when approached by The News.

Councillor Luke Stubbs, Portsmouth deputy leader of the city’s Conservative party, said he was worried and has demanded answers.

Cllr Stubbs said: ‘These are worrying times for the high street.

‘No-one knows whether either of the Portsmouth branches is on the closure hit list, but the effect of either going would be such that the council needs to be actively seeking reassurances now.

‘Waiting and seeing is not enough.’

The concerns come off the back of the news that the John Lewis, which announced it would close the Knight & Lee store in Palmerston Road at the end of July – putting 127 jobs at risk.

Councillor Ben Dowling, who heads up planning, regeneration and economic growth in Portsmouth, was also concerned and said he would be writing to Debenhams for clarity.

He said: ‘Debenhams is an important part of Portsmouth life. We have just had the closure of Knight & Lee so we’re keen to keep Debenhams going both in the city centre and in Palmerston Road.’

Debenhams previously ramped up its store closure plans, estimating that 50 will be shut over the next three to five years.

But the use of a CVA could accelerate this further, with up to 20 store closures thought to be likely this year if the plans go ahead.

Meanwhile the company is expected to make an announcement on the status of refinancing negotiations with its lenders later this week.

It has been locked in talks over its £520m borrowing facilities, as it seeks a fresh cash injection. Options include a debt for equity swap.

Sports Direct founder Mike Ashley, who already holds a 29 per cent stake in Debenhams, has previously offered to give the company a £40m loan, claiming that the business in its current state has ‘zero chance of survival’.

Although his offer was turned down due to the conditions attached, it is understood that Mr Ashley remains engaged with Debenhams interim chairman Terry Duddy.

The development comes after last month’s news from John Lewis, which announced it would close the Knight & Lee store in Palmerston Road at the end of July.

The store opened in 1887. The decision has put 127 city jobs at risk - although John Lewis previously claimed it would do its best to move people to work in Southampton or Chichester.