The discount department store group Beale is in talks about a reorganisation of its finances, the latest in a swathe of retailers attempting such a move amid difficult high street trading conditions.
People close to the situation said that little-known Beale, which has a market capitalisation of just £3.5m and net debt of £5.2m, is nearing a deal that may involve switching its banking business away from HSBC (LSE: HSBA.L - news) .
PricewaterhouseCoopers (PwC), the audit firm, is advising Beale on the refinancing, plans for which are understood to have moved forward in recent days.
The Bournemouth-based department store group operates 32 shops and traces its roots back to 1881, when the then mayor of the Dorset town, John Elmes, opened its first outlet.
Beale has performed choppily in recent times, losing nearly £1m in the half-year to April (Paris: FR0004037125 - news) 28, 2012 and registering a sharp decline in like-for-like sales during the period. It is expected to give an update on its Christmas trading performance shortly.
Insiders insisted that Beale had engaged in the refinancing discussions “from a position of strength” and said it was “by no means certain” that the company would move its banking arrangements to another lender. Its current borrowing agreement with HSBC does not see its debt mature until 2016.
Earlier this week, Beale announced that Tony Brown, its chief executive, was stepping down to pursue his career elsewhere. Mr Brown is understood to be lined up to take over as the managing director of Peacocks, the discount fashion retailer, and will be replaced by Michael Hitchcock, Beale's chief financial officer.
Beale is chaired by Keith Edelman, best-known for his stint running Arsenal Football Club.
In a statement issued to Sky News, the company said: "Whilst Beale will never comment on anything specific we are a prudent company that is always seeking the most efficient and effective way of financing our development."
HSBC and PwC declined to comment.
A number of retailers, including New Look, the fashion chain, are in talks about debt restructurings, while the torrid retail environment has seen companies including HMV and Jessops call in administrators already this month.