Debenhams has been given the green light to close 50 stores, putting hundreds of jobs at risk.
The troubled department store chain has received approval from its creditors to press ahead with a Company Voluntary Arrangement (CVA), an insolvency procedure that allows struggling firms to close underperforming stores.
Creditors, including landlords, voted in favour of the plans that will also see rents lowered on more than 100 outlets.
Debenhams chairman Terry Duddy said: “I am grateful to our suppliers, our pension stakeholders and our landlords who have overwhelmingly backed our store restructuring plans.
“We will continue to work to preserve as many stores and jobs as possible through this process. This is a further important step to give us the platform to deliver a turnaround.”
Debenhams has already said that 22 stores will close by next year, with the remainder to follow.
The CVA will put 1,200 jobs at risk across the department store chain and comes after a tumultuous period for the retailer.
Earlier on Thursday, Debenhams confirmed that it will remain in the clutches of its lenders after a sale process ended with no acceptable bids.
The group of creditors, which took control of the retailer after it went into a pre-pack administration last month, said administrators at FTI Consulting considered buyout bids to be “not at the level required to be taken forward”.
The consortium, called Celine, gave assurances that it is a “committed long-term owner” and has provided Debenhams with £200 million in fresh funding.
Details were not given on the number of suitors or level of bids.
But it is understood Mike Ashley’s Sports Direct, which owned a 29% stake in Debenhams, was not one of the bidders, despite having led an aggressive campaign to take control of the retailer before its pre-pack administration.
Bidders would have had to refinance the chain’s mammoth debts, which run to more than £500 million.
Stefaan Vansteenkiste, representing Celine, said: “The investor consortium is a committed long-term owner, which has provided Debenhams with £200 million in fresh funding for the financial restructuring process and to fund the company’s operating turnaround.
“Within the consortium, there is extensive turnaround experience, which we will deploy to support the management’s plan and to position Debenhams for a long-term successful future.”
Debenhams’ pre-pack administration last month wiped out the stakes of all shareholders including Sports Direct.
A spokesman for the Debenhams Pension Schemes said: “The trustees welcome the news that Debenhams’ creditors have voted in favour of the CVA. They hope that the CVA process will complete successfully and that it will facilitate a sustainable solution for Debenhams, which will ensure that the schemes are supported in the long term.
“As the trustees have made clear previously, all pensions will continue to be paid as normal during the CVA process. The trustees will continue to keep members informed of developments.”