Debenhams could close one third of its stores following a string of profit warnings and poor trading.

The ailing department store chain has identified one in three of its 166 stores as a candidate for closure, according to The Mail on Sunday.

The retailer, which is also planning to slash its dividend to zero, is aiming to save £100m in cost savings.

Debenhams will report its annual results on Thursday.

It has struggled with a large number of onerous leases signed by previous management in less challenging times for the sector, but has always maintained that it does not not have a long tail of unprofitable stores and that only around 10 stores are in danger of becoming loss-making over the next few years.

However, in an letter in property industry magazine Estates Gazette last week, Debenhams chief executive Sergio Bucher wrote: “After our people, property is our biggest cost. And, right now, it is our biggest challenge.

“While almost all of our 166 UK stores are profitable today, extrapolate current market trends three to five years forward and that picture is going to change.”

Debenhams has been opening new stores under its Debenhams Redesigned strategy, with its most recent in Watford including a modern iteration of its beauty hall.