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Department Stores

Mike Ashley promises to ‘save’ Debenhams

Mike Ashley has made a promise to “save as many Debenhams stores and jobs” as he can similarly to House of Fraser, following the department store going under the control of its lenders.

Sports Direct released a statement after Debenhams was placed into administration saying it was a “national scandal” that marked the end of the company’s “sorry chapter”. It went on to say the “disastrous outcome” was “totally avoidable”.

The sportswear retailer said it had set out to “preserve value” for the department store’s stakeholders from the beginning but blamed the board of Debenhams of stalling, preventing or blocking “constructive dialogue”.

Sports Direct has made a number of offers for Debenhams in an attempt to save the company and provide it with funding, but the department store has rejected each one. The proposals all came with the condition that Mike Ashley would step down from his role as CEO of Sports Direct and be appointed Debenhams’ CEO. He also called for the entire Debenhams board to be removed upon his appointment.

With Debenhams in the hands of its lenders – which include Barclays, Bank of Ireland, Silver Point and GoldenTree – it is expected to be sold as soon as possible while continuing to trade as normal.

Debenhams confirmed its intention to close 50 of its stores before it went into the pre-pack administration but it is unknown which sites are marked for closure.

Sports Direct’s statement said: “Numerous statements by the board of Debenhams have at best been over-optimistic in their description of the business’ performance, its outlook and the likely impact of the board’s actions on Debenhams’ shareholders.”

Ashley also said the company would be calling on the authorities to reverse the process.

He added: “As normal, politicians and regulators fiddled whilst Rome burnt. These politicians and regulators have proven to be as effective as a chocolate teapot. I restate my call for the advisors to go to prison given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners.

“Whilst these hedge funds look to close a significant number of stores and put thousands of people out of work, as politicians and regulators look on, I will go to the ends of the Earth to save as many Debenhams stores and jobs as I can, similar to the promise I made with regards to House of Fraser. While there may be some short term cost to Sports Direct and our shareholders, sometimes you have to do the right thing, something the board of Debenhams and the hedge funds have manifestly failed to do.”

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