Acquisitive retail groups and landlords have been put on notice after Debenhams brought in a potential liquidator.

After announcing 2,500 job cuts last week, the department story group was reported to have appointed wind-up specialists Hilco Capital to prepare emergency plans if the worst comes to the worst and cost-cutting attempts fail.

READ: Frasers Group rumoured to be in for Dave Whelan’s DW Sports

Debenhams put out a statement saying it is “trading strongly”.

A spokesperson said that Hilco’s has been brought in as a potential “last resort” contingency plan by administrators FRP.

The proposals would result in all of the company’s 124 stores closing, putting its 14,000 workforce at risk.

Meanwhile, investment bank Lazard is still in the fairly early stages of a process to find a buyer for the company.

Mike Ashley’s Frasers Group PLC (LON:FRAS) has said it is actively looking at buying some Debenhams stores but is “only interested in sites where we can heavily invest in a new proposition”.

Landlords such as British Land (LON:BLND), Hammerson (LON:HMSO) and the recently collapsed Intu Properties PLC both have a number of Debenhams stores as clients, and could take further hits at John Lewis confirmed on Monday that eight sites announced in July as at risk of closure will not reopen.

The closures include Grand Central department store in Birmingham, one of Bull Ring owner Hammerson’s properties, plus those in Croydon, Watford, Heathrow Terminal Two, St Pancras International, Birmingham, Swindon, Tamworth and Newbury.

Followers of the Debenhams link its current travails with its period of ownership by private equity firms Texas Pacific, CVC Capital Partners and Merrill Lynch’s PE arm, which took the chain private in 2003, took on tons of debt and sold all the freeholds and put the stores on long leases. 

The trio took £1.3bn in dividends from Debenhams in less than three years of ownership before coaxing City investors into buying the shares when they brought the group back to the public market in 2006, making three times the equity they put into the business.

Shares in British Land were down 2% on Monday afternoon, Hammerson recovered from its earlier falls, while Fraser was up almost 4% to 293.4p.

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