Mike Ashley in last minute bid to save Debenhams

Billionaire Mike Ashley is racing to seal a last-gasp rescue of Debenhams this weekend in a dramatic intervention that could save up to 12,000 jobs.

The Frasers Group tycoon has revived his interest in taking over the struggling department store chain at the eleventh hour. The move could save Debenhams from liquidation: the 242-year-old group had seemed set to disappear from the high street for good after JD Sports withdrew from the running to buy it from administrators last Tuesday.

Ashley’s group, which owns Sports Direct, and advisers to Debenhams are trying to thrash out a deal that could value the chain at more than £200m, depending on how much stock is left. Frasers would operate Debenhams’ 124 stores under 12-month licences.

A deal would bring much-needed relief to high streets already reeling from last week’s collapse of Sir Philip Green’s Arcadia Group, the owner of Topshop. Philip Day’s Edinburgh Woollen Mill, Peacocks and Monsoon Accessorize, as well as TM Lewin, have also all fallen into administration after being deprived of customers during lockdowns.

Frasers finance director Chris Wootton warned that the Debenhams negotiations were on a knife edge. “We hope to be able to save as many jobs as possible,” he said. “However, we have found that Debenhams has been overly reliant on Arcadia for many years, and with the administration of Arcadia last week, as well as no end in sight to the outdated business rates regime which unduly punishes the likes of Debenhams, it may be a bridge too far.”

An agreement would mark a happy culmination to Ashley’s dogged and often rancorous pursuit of Debenhams. As its biggest shareholder, he frequently lambasted executives for failing to heed instructions, booting chairman Sir Ian Cheshire and chief executive Sergio Bucher off the board last year. In an unsuccessful scramble to avoid being wiped out in a debt-for-equity swap, Ashley offered loans — on condition he be made chief executive. He lost an estimated £150m when the chain was taken over by American hedge fund Silver Point Capital.

Debenhams chairman Mark Gifford has been fighting to save the business, which fell into administration at the onset of Covid-19 and was then put up for sale. Ashley reacted angrily to being frozen out of the process, claiming he had received inadequate information, although the parties are now said to be proceeding in good faith. Buying Debenhams would achieve his long-held ambition of uniting the chain with House of Fraser, although this might attract the attention of competition authorities.

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