Liquidation plans are being drawn up for Debenhams in case other options for saving the department store chain fail, potentially threatening thousands of jobs.
It is understood restructuring firm Hilco Capital has been appointed to work on "contingency plans" with the retailer in the event that a sales process for the well-known British high street brand fails.
Debenhams, which has 124 stores and employs a reported 14,000 staff across the UK, collapsed into administration four months ago and announced plans to axe 2,500 jobs throughout its stores and warehouses earlier this week.
A source close to the company said administrators were required to have liquidators on standby "in the unlikely event that all other options for the business do not materialise".
A spokesman for the retailer said: "Debenhams is trading strongly, with 124 stores reopened and a healthy cash position.
"As a result, and as previously stated, the administrators of Debenhams Retail Ltd have initiated a process to assess ways for the business to exit its protective administration.
"The administrators have appointed advisers to help them assess the full range of possible outcomes which include the current owners retaining the business, potential new joint venture arrangements (with existing and potential new investors), or a sale to a third party."
Hundreds of jobs have already been lost at the more than 200-year-old retailer since the start of lockdown after it permanently shut 18 stores.
In April, it hired administrators from FRP Advisory in a protective measure against creditors demanding their money.
Hilco Capital has been contacted for comment.
More than 4,300 job losses have been announced this week by major British retailers and more than 730,000 UK workers have been taken off payrolls since March.