Mike Ashley’s Frasers Group in talks over ‘potential rescue’ for Debenhams

Mike Ashley’s Frasers Group has confirmed it is in talks over a “potential rescue transaction” for collapsed department store Debenhams.

The retailer said in a stock market statement that it was “in negotiations with the administrators of Debenhams’ UK business” on a possible deal.

It added: “Whilst Frasers group hopes that a rescue package can be put in place and jobs saved, time is short and the position is further complicated by the recent administration of the Arcadia group, Debenhams’ biggest concession holder.

“There is no certainty that any transaction will take place, particularly if discussions cannot be concluded swiftly.”

The statement on Monday came after details of talks were first disclosed over the weekend by The Sunday Times.

Finance director Chris Wootton reportedly said that under the deal, Frasers would “hope to be able to save as many jobs as possible”.

Debenhams, the 242-year-old department store chain, revealed last week that it was to be wound down, putting 12,000 jobs at risk. Attempts to find a buyer after it fell into administration came to nothing.

Were it to disappear entirely, it would spell the single-biggest jobs hit from one UK company during the pandemic – as the retailer has already axed 5,000 jobs.

Once the chain’s biggest shareholder, Mike Ashley’s stake in Debenhams was wiped out last year when it was taken over by its lenders – after his own bid for the beleaguered business was rejected.

Reports claim that the tycoon is now seeking to pick up the most valuable parts of the business but that his offer may fall short of the valuation placed on Debenhams – which has 124 stores – by its administrators.

Shares in Frasers were trading 2% lower after Monday’s announcement.

Mr Ashley, whose business empire was founded on the Sports Direct brand, already controls House of Fraser – another department store chain which had collapsed when he bought it.

The announcement that Debenhams was to wind down last week sparked a rush of shoppers to its stores and online with bargain hunters keen to snap up cut-price deals as it clears stock.

Its collapse came on a grim week for the high street as Sir Philip Green’s Arcadia group – the company behind brands such as Topshop and Burton – entered administration putting 13,000 jobs at risk.

Meanwhile, fashion retailer Bonmarche, which employs 1,500 people, was also forced to call in administrators while the owner of Primark said autumn lockdowns had cost it £430m in lost sales.

Debenhams’ fate was linked to the collapse of Arcadia – its biggest supplier.

Arcadia’s demise spooked JD Sports, Mr Ashley’s sportswear rival, which had been lining up a rescue of Debenhams.

(c) Sky News 2020: Mike Ashley’s Frasers Group in talks over ‘potential rescue’ for Debenhams