THE future of a town’s flagship store was again in question after its owner went into administration and was then sold to its lenders.

Debenhams' two-floor Blackburn outlet is the largest unit in The Mall shopping centre and employs dozens of workers directly or by concessions.

Yesterday morning the chain’s owners rejected a second £200million rescue bid by Sports Direct owner Mike Ashley and placed the firm with administrators who immediately sold the group to its lenders.

The news rocked the City of London leading to speculation it could led to the rapid shutting of 50 stores earmarked for closure in October. The latest fears over Debenham’s future in the town comes as Blackburn with Darwen Council is set to seal a deal with a developer to bring three high-quality retailers to the nearby former market site.

Cllr Phil Riley, borough regeneration boss, said: “We are concerned at the latest developments. Any closure of Debenhams would be a blow to the town.

“The Blackburn store has survived previous scares about its future and we understood it did well in Christmas trading.”

Loraine Jones, manager of The Mall, said: “We were sorry to see the announcement about Debenhams’ national administration. The store continues to trade and we will be monitoring the situation as it develops.”

Tony Duckworth, president of Blackburn and District Chamber of Trade, said: “This is devastating new s about Debenham’s nationally. It’s now fingers-crossed time for the Blackburn store which has been Blackburn town centre’s anchor retailer since the 1970s.”

Cllr John Slater, leader of the council Conservative group said: “I am very concerned as Debenhams would be a big hole to fill and employs a lot of people.”

The financial moves wipe out the stake held by Mr Ashley and those of all other shareholders.

It also cancels plans for an emergency shareholder meeting in which Mr Ashley was to seek his appointment to the board and attempt to oust most other directors.