DEBENHAMS is to start a liquidation process after JD Sports confirmed it had pulled out of a possible rescue deal, putting 12,000 workers at risk - including many in the North-East.

The 242-year-old department store chain said its administrators have “regretfully” decided to start winding down operations while continuing to seek offers “for all or parts of the business”.

JD Sports confirmed this morning that it pulled out of talks about a possible rescue of Debenhams, which has 124 stores, following the collapse of Arcadia.

The retailer, which has stores in Sunderland, Newcastle, and Middlesbrough, fell into administration for the second time in April but the possibility of a rescue from JD Sports faded after the collapse of Arcadia. 

READ MORE: 'How long before it's us?' - Rival staff worried amid potential Topshop collapse

It comes as Sir Philip Green's Arcadia Group, Debenhams' biggest concession operator, has gone bust, putting 13,000 jobs at risk.

The high street giant, which includes the Topshop, Dorothy Perkins and Burton brands, has hired administrators from Deloitte after the pandemic "severely impacted" sales across its brands.

The group, which runs 444 stores in the UK and 22 overseas, said 9,294 employees are currently on furlough.

No redundancies are being announced yet as a result of the appointment and stores will continue to trade, the administrators said.

READ MORE: 'Sobering' report finds Covid caused 'tectonic shift' in North-East tourism sector

Mike Ashley's Frasers Group, which runs Sports Direct and House of Fraser, also offered up a rescue bid of £50 million, but this was rejected. 

It is the latest retailer to have been hammered by store closures during the coronavirus pandemic. Rivals including Debenhams, Edinburgh Woollen Mill Group and Oasis Warehouse have all slid into insolvency since lockdown measures were first imposed in March.