Sycamore Partners’ Belk is close to a deal where the department store chain would file for bankruptcy protection, and provide its lenders with a stake in the company, people familiar with the matter told Bloomberg.

Talks between the parties are still ongoing, the news outlet said, warning that terms hadn’t yet been finalized.

Last week, the Wall Street Journal reported Belk was approaching a deal where the retailer would have remained outside of bankruptcy.

Department stores have struggled to adapt to the changing market during the pandemic as more shoppers shift purchases online and head to malls less frequently. Shoppers also have been purchasing less apparel, which is a key category for many department stores. In early January, Macy’s announced dozens of store closures and several department store chains, including Neiman Marcus, J.C. Penney and Lord & Taylor sought bankruptcy protection last year.

Sycamore declined CNBC’s request for comment. Belk wasn’t immediately available to comment on the report.

For more information, see Bloomberg’s full story here.

—CNBC’s Lauren Thomas contributed to this report.