Debenhams stakeholders are understood to be preparing to place the department store chain into administration as soon as next week.

The department store retailer, which employs 22,000 people, is understood to be preparing to file a notice of intention to appoint administrators in a bid to protect itself from creditors amid the coronavirus pandemic.

KPMG is among the accountancy firms that have been put on standby to handle the process, were it to go ahead, Sky News reported.

The prospective move to appoint administrators has not yet been decided definitively and it remains possible that another outcome could be reached by Debenhams shareholders.

However, if the decision to appoint administrators was taken it would be intended to shield the company from legal claims from creditors during the period of the coronavirus outbreak.

It is understood the business would continue to trade online through any prospective administration process, with the intention of allowing conversations with lenders to continue while further financing is secured.

A Debenhams spokesman said: “Like all retailers, Debenhams is making contingency plans reflecting the extraordinary current circumstances.

“Our owners and lenders remain highly supportive and whatever actions we may take will be with a view to protecting the business during the current situation. While our stores remain closed in line with government guidance, and the majority of our store-facing colleagues have been furloughed, our website continues to trade and we are accepting customer orders, gift cards and returns.”

The possibility of Debenhams being placed into administration comes shortly after the retailer furloughed the vast majority of its workforce following the closure of its 142-strong store estate.

Wages for impacted staff will be covered for the next three months by the government’s coronavirus job retention scheme.

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