Retail in Moray and Scotland: Mike Ashley bids to buy Debenhams
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A last minute bid has been made by businessman Mike Ashley to buy the closure-threatened department store chain Debenhams.
Debenhams, which has been in administration since April, had warned that its remaining 124 stores – including the Eastgate II anchor store in Inverness – are likely to close in the new year, putting 12,000 jobs at risk.
However, Mr Ashley's Frasers Group has confirmed an interest in taking over the 242-year old firm, raising hopes that at least some stores and jobs might be saved, although it did warn that there was no certainty a deal would be agreed.
Mr Ashley, the founder of the Sports Direct Group, had previously made an offer for Debenhams in April, but this was rejected, leaving rival JD Sports as the last potential bidder. When JD Sports' bid also fell through, Debenhams began a winding up process.
An official statement released by Frasers Group said: "The company confirms that it is in negotiations with the administrators of Debenhams' UK business regarding a potential rescue transaction for Debenhams' UK operations.
"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."
Professor John Colley, associate dean of Warwick Business School and an expert in mergers and acquisitions, said: "Mike Ashley has learnt the best way to buy a business is out of administration as there is no debt and all contracts can be renegotiated.
"This is ideal as his real strength is negotiating efficient and low cost supply chains.
"Administrations also mean the buyer can take the profitable parts and leave the rest.
"For Debenhams, Mike has waited for ‘last shout’ – that is the announcement of liquidation – to get the best deal. The good news is it is likely some stores and jobs will be retained.
"If he is successful Debenhams is likely to take on the same feel and appearance as his House of Fraser stores, lacking in soul, with cut down ranges and much reduced floor space.
"However, that is much better that the alternative – major closures and hollowed out town centres."