The City appears to be pessimistic about Debenhams' prospects this Christmas, with the amount of short-selling of the retailer's stock rising to its highest level for more than four years.
According to data from the Financial Conduct Authority, the amount of stock borrowed by hedge funds to bet against Debenhams' fortunes has ramped up in recent weeks, rising from around 13 per cent at the beginning of September to 14 per cent on 1 November.
This week, Liberum also added the stock to its top 10 list of shares to sell.
"The short sellers are betting against the mainstream clothing retailers ahead of what is expected to be a very competitive final quarter as the consumer continues to see disposable incomes squeezed by inflation and the recent rise in interest rates," said Mark Photiades, retail analyst at Cantor Fitzgerald.
Neil Wilson, analyst at ETX Capital, said that retailers faced structural issues, and that the City may well expect firms to have a particularly tough Christmas.
However, he said Debenhams "looks a little too unloved", adding that its new chief executive, Sergio Bucher, may well be able to turn its fortunes around.
Read more: Debenhams' trading director steps down
Hargreaves Lansdown's George Salmon said that as a former Amazon executive, Bucher was well-placed to improve Debenhams' online offering.
"Unfortunately, many of its stores are tied into long leases, which means UK shopping habits are changing faster than Debenhams can react," Salmon said.
"For the time being then, Debenhams’ fortunes are closely tied to that of the high street. With the latest data showing another unwelcome decline in high street sales, there’s little it can do to swim against the tide."
Data from the British Retail Consortium, released today, found non-food sales grew by just 0.2 per cent in October, the weakest growth recorded since the trade body's records began in 2011.