WINCHESTER town centre has been dealt a huge blow with the shock news that Debenhams could be set to close all its stores as rescue talks collapse.

It comes after JD Sports today pulled out of rescue talks for the troubled department store chain, putting 12,000 workers at risk.

The 242-year-old department store chain said its administrators have "regretfully" decided to start its liquidation process, while continuing to seek offers.

Debenhams said it will continue to trade through its 124 UK stores and online to clear its current and contracted stocks, but it is believed that stores will close early next year.

"On conclusion of this process, if no alternative offers have been received, the UK operations will close," the company said in statement.

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."