Harris Scarfe, the bankrupt department store group of 35 outlets, is to close nine of its underperforming stores in an effort to tempt potential buyers back to the bargaining table, the Sydney Morning Herald reported.

The closures will hit more than a quarter of its stores and will see 470 jobs lost. The job cuts are already under way, said receiver Ferrier Hodgson, with 50 jobs axed yesterday at the company's head office.

Six stores will shut over the next four months, but the fate of the remaining three is still in the balance, the newspaper reported. Ferrier Hodgson denied that a second round of closures was likely.

The cuts are being carried out to tempt back buyers, rumoured to include Toorak Holdings and Dimmeys, who have put in bids of around A$100m - way below the group's book value of A$150m.

"It is apparent that completing a sale requires that the business be restructured to maximise its profit potential," said Mr Bruce Carter, of Ferrier Hodgson.

He was optimistic the down-sized group would be better positioned to attract a buyer "committed to a long-term future" with the company.