A group owned by the retail tycoon Mike Ashley is officially in talks with administrators to potential rescue the recently collapsed department store business Debenhams.
Statements given to the stock market by the Frasers Group have confirmed reports that a “potential rescue transaction” has been discussed with administrators of the centuries old retailer which is otherwise heading for liquidation.
The Frasers Group is a retail operator that traded until recently as Sports Direct International and which owns a string of high street retailer brands in the UK, including Jack Willis, USC and Flannels.
Having acquired the House of Fraser department store business in 2018 for £90 million in cash, the Frasers Group now clearly has its sights set on a potential deal to acquire Debenhams
Statements given by the group on December 7 said: “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.”
Reports that the Frasers Group was in discussion to buy Debenhams first appeared in the Sunday Times at the end of a week in which the Arcadia Group entered administration and plans were put in place for Debenhams to be liquidated.
The Arcadia Group owns the retail chains Topshop, Topman, Dorothy Perkins, Burton and Miss Selfridges and its 13,000 employees are currently facing a very uncertain future.
News of the Frasers Group’s attempts to rescue Debenhams from liquidation will offer some hope to thousands of its staff, although many of its formerly 12,000-strong workforce have already been laid off.
Debenhams has been in existence for some 242 years but struggled to turnaround a consistently worsening financial position over the past several years.
It is unclear exactly what Mike Ashely and the Frasers Groups’ plans would be for the different aspects of the Debenhams business if a rescue deal were to be agreed.
High street retailers across the UK have been faced with extraordinarily tough operating conditions throughout 2020 and redundancies and store closures have been widespread in the industry in recent weeks and months.