Hardware retailer Robert Dyas is considering a debt-for-equity swap with its bank Lloyds.

It is one of several options being assessed by the retailer’s owner, private equity firm Change Capital, as it seeks to navigate the downturn.

Sources close to the situation said the idea does not mean that the retailer is in financial trouble.

Like-for-like sales at Robert Dyas rose 3 per cent in the calendar year to date and total sales increased 5 per cent. Gross margin is said to be at a strong level.

Sources said Change Capital is “very much committed” to Robert Dyas and is prepared to inject more cash into the business, but only if it has the co-operation of the bank.

Change Capital believes its investment must be part of a wider range of actions such as an increase in working capital. Refinancing discussions between Change Capital and Lloyds have been reportedly taking longer than expected.

Last month Retail Week revealed the hardware specialist asked its landlords for rent reductions as it seeks to cut costs across its store portfolio (March 20).