Debenhams shareholders back Mike Ashley becoming CEO

Sports Direct has said a number of other shareholders in embattled department store Debenhams have expressed support in Mike Ashley becoming CEO of the company.

Ashley’s retail company Sports Direct has an almost 30% stake in Debenhams and as the department store has been seeking funding to help with its restructuring program, Ashley has made a number of offers to the company.

The majority of Ashley’s proposals have included him being appointed CEO of Debenhams and removing all of its current board members except Rachel Osborne.

Debenhams’ approved a £200m refinancing on 29 March which could see its stakeholders’ shares wiped out. Terry Duddy, chairman of Debenhams, said the loan meant the company could move on to “the next phase of the restructuring of the business” which included reducing rents and reshaping its store portfolio.

The statement went on to say that the offers made by Sports Direct “did not provide a solution to the group’s immediate working capital needs” and the board could “find no way for the group to continue to trade until such time as the offer”.

In a statement following Debenhams’ loan approval, the sportswear retailer said it had been contacted by shareholders who backed Ashley becoming CEO and therefore created a template letter addressed to the department store for others who also wished to support the retail tycoon’s appointment.

The template reads: “As a concerned shareholder in Debenhams plc, I have watched with increasing concern the board continue to ignore the interests of its shareholders as it has sought new banking facilities from its existing lenders and noteholders.

“In particular, I was gravely concerned by your statement on 22 March 2019 where you acknowledged that under your current course of action, there was an increasing possibility that the entire equity value for the company’s current shareholders would be wiped out.

“I am therefore writing to demand that the Debenhams board takes immediate steps to install Mike Ashley as CEO, as clearly there is no time to wait for a general meeting to be called in order for this to be affected by shareholders.”

On Thursday (28 March) Ashley criticised Debenhams’ advisers as he said: “If there were any justice in the world the majority of the advisors would be put in prison.”