Debenhams is speaking to a dozen companies, including Sports Direct, about opening departments in its stores as it tries to recover from a collapse in profits.
The department store chain's chief executive, Michael Sharp, said it was discussing stocking some of Sports Direct's 28 clothing brands as it looked to bring in new names while at the same time weaning customers off what had become increasingly frequent promotions.
"We have talked about the sportswear opportunity in Debenhams and whether between us we could concoct something that makes sense for our customers," he said.
First-half profits at the department store tumbled by nearly a quarter to £85.2m on sales of £1.3bn after dire Christmas trading culminated in a profit warning on New Year's Eve.
That was followed in January by a surprise move by Mike Ashley's Sports Direct which bought a near 5% stake only to sell it days later and replace it with a complex financial instrument called a "put" option that could hand it a larger stake in the long run. Sharp said Sports Direct had not elaborated on its motives for targeting Debenhams.
"All they are required to do is tell us they have done it – not why," he said. "We have talks with loads and loads of brands and any discussions with Sports Direct have been in the same vein."
Sports Direct is keen to find outlets for a portfolio that includes labels such as Firetrap, Full Circle, Hot Tuna and SoulCal as well as traditional sports brands such as Dunlop, Slazenger and Everlast.
Following a postmortem on its Christmas performance Debenhams has concluded that 10% of its floor space – 1m sq ft – could be made more profitable by introducing new brands and services such as coffee shops.
"We are currently in discussions with a number of well known brands, some of which are expected to be trialled over the next six months," said Sharp.
Sharp needs to regain the trust of the City after the Christmas debacle when its traditional campaign of discount days and promotions was lost amid a "sea of red" tickets on the high street. The retailer is cutting back the number of promotions it runs so events such as its regular "Blue Cross" sales have more impact.
"We need more light and shade on the calendar so there will be no more small events that create a lot of noise and don't give us any impact," Sharp said.
Debenhams also lost sales to retailers with more competitive online propositions, such as Next which offers a next day delivery service on orders placed as late as 10pm.
Sharp said convenience had been the "single biggest factor" that determined where people shopped in the three weeks before Christmas and so it had stepped up investment in behind-the-scenes operations to bring its delivery options into line with rivals.
The shares closed up more than 4% at 81p.
