Debenhams has revealed that potential buyer JD Sports has pulled out of the bidding race for the ailing department store chain, leaving it with no choice but to concede defeat.

The business will now begin a “wind-down” process of its operation as it sells off remaining stock and continues to look for buyers for smaller parts of the company.

The Guardian reported that the news means as many as 12,000 Debenhams staff could be left jobless after the process is over.

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A statement from the department store chain read: “The sale process has not resulted in a deliverable proposal. Given the current trading environment and the likely prolonged effects of the COVID-19 pandemic, the outlook for a restructured operation is highly uncertain.

“The administrators have therefore regretfully concluded that they should commence a wind-down of Debenhams UK, whilst continuing to seek offers for all or parts of the business.”

Meanwhile, Geoff Rowley of FRP Advisory, joint administrator to Debenhams and partner at FRP, said: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams.

“However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.

“The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.

“We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading.

“We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.”