Shares in Debenhams plunged 17 percent as the retailer called in KPMG to help turn the business around.
Having admitted that the current high street market conditions are “challenging”, the retailer is thought to be considering a range of options including a company voluntary arrangement (CVA).
The department store’s share price has fallen by two-thirds since January and the group has also issued three profit warnings this year.
“Like all companies, Debenhams frequently works with different advisors on various projects in the normal course of business,” said the group in a statement.
Richard Lim, from Retail Economics, said: “The fact KPMG have been brought in does not surprise me. Debenhams will be wanting to look at all the options open to them.”
“The harsh reality is that they are operating in one of the most challenging parts of retailing at the moment. Consumers are increasingly shopping online, and they are also spending more on things like holidays and the experience economy.”
“The other part of the pincer movement Debenhams is facing, is that they are being squeezed on costs, with things like increasing rents and business rates, and rising wage and utilities bills,” he added.
“It all means that department stores are incredibly expensive to operate.”
The department store has issued a series of job cuts this past year. In February, the group announced plans to slash 320 store management roles. More recently, Debenhams said it could cut a further 90 roles.
Debenham’s talks with KPMG come at a troubling time for the high street.
House of Fraser recently collapsed into administration and the chain was bought by Sports Direct founder Mike Ashley in a £90 million deal.
Mothercare has announced plans to close 50 stores under a CVA, and Marks & Spencer said it would close 100 shops over the next four years.
Shares in Debenhams (LON: DEB) are trading down 17.27 percent at 10,59 (0849GMT).