Debenhams will not be sold to a white knight bidder to rescue stores from closure, and instead will press ahead with plans to "restructure" that could put 1,200 jobs at risk.
The group of creditors, which took control of the retailer after it went into a so-called pre-pack administration last month , said the administrators at FTI Consulting thought the buyout bids they received were "not at the level required to be taken forward".
Details were not given on the number of suitors or level of bids.
Bidders would have had to cover the chain's debts, which ran to more than £500 million.
The company will now remain in the hands of its lenders for the foreseeable future.
The consortium running the iconic department store, called Celine, gave assurances that it is a "committed long-term owner" and has provided Debenhams with £200 million in fresh funding.
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Stefaan Vansteenkiste, representing Celine, said: "The investor consortium is a committed long-term owner, which has provided Debenhams with £200 million in fresh funding for the financial restructuring process and to fund the company's operating turnaround.
"Within the consortium, there is extensive turnaround experience, which we will deploy to support the management's plan and to position Debenhams for a long-term successful future."
Debenhams will now press ahead with its plans for a company voluntary arrangement (CVA) to allow it to close 22 of its least profitable stores and slash rents on more than 100 outlets.
The plans will put 1,200 jobs at risk across the department store chain.
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Creditors, including landlords, are set to vote on the CVA agreement later on Thursday - 75% need to approve them for the deal to be done.
But Sports Direct is reportedly set to vote against the deal.
Executive chairman Terry Duddy said: "I am pleased that our new owners have confirmed their commitment to Debenhams and remain supportive of our plans to restructure the business.
"We are confident that we will receive support for our CVA proposals, which make sense for all parties, and will give us the platform to deliver a turnaround."
Debenhams' pre-pack administration last month wiped out the stakes of all shareholders including Sports Direct.
