Debenhams shares plunged 17 per cent after KPMG was called in to help draft emergency plans to save the troubled retailer.
The chain is said to be considering a list of options including a company voluntary agreement, a controversial insolvency procedure used by struggling firms to shut under-performing shops.
The company has brought in KPMG to help draw up the turnaround plans, according to The Sunday Telegraph which first reported the news.
If Debenhams carries out a CVA, it would join a raft of retailers including New Look, Carpetright and Mothercare, who have opted for the restructuring tool despite anger from landlords who say it leaves them out of pocket.
The news sent shares down more than 17 per cent in morning trading but it later issued a trading update, predicting full-year pre-tax profits of around £33m before exceptional items.