DEBENHAMS is reportedly on the brink of collapse, with administrators expected to be appointed as early as next week.

The retailer, which employs about 22,000 people, has placed KPMG on standby to handle the process, according to Sky News.

The move would be designed to shield the company from legal claims from creditors during the period of the coronavirus outbreak.

Debenhams' lenders took control of the retailer in April last year in an effort to keep stores open.

The move would come just days after Debenhams put the vast majority of its workforce on 'furlough', following the closure of its 142 stores across the UK.

They have since shut due to the outbreak - although the website remains open.

Employees' wages will now be covered for three months by the government's Coronavirus Job Retention Scheme.

In a statement to Sky News on Friday, 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."

Debenhams has already written to landlords to inform them that it requires a five-month rent holiday, while this week it notified suppliers of a 31-day delay to some payments.

The department store operator, which traces its roots to 1778, has been working on a plan to permanently close 50 shops, leaving around 110 as its core estate.

Just over 20 have closed already, leaving 28 more locations to be identified.