Debenhams hopes to undertake a £500m sale and leaseback on its 23 freehold properties, which includes its flagship Oxford Street store, to pay down more debt.

Rob Templeman, chief executive, re-mortgaged the 23 freehold stores at the time of the takeover to raise capital to refinance an expensive bridging loan. It is now thought that Templeman wants to use the proceeds of a sale and leaseback to pay down that mortgage debt and raise potentially extra funds for the department store chain.

The current management team at Littlewoods is mulling whether or not to make its own offer for the 186-strong store chain after it emerged last week that the Barclay brothers were considering selling the stores. "A management offer could be an option but there haven't even been preliminary talks with backers yet," said one person familiar with the situation.