Sports Direct denies intention to scupper Debenhams' Magasin du Nord sale
Sports Direct said on Monday that any suggestion that it wants to block the potential sale of Debenhams' Magasin du Nord was “irresponsible and incorrect” as it denied claims that it wants the department store chain to collapse.
Debenhams, in which Sports Direct has an almost 30% shareholding, is believed to be in talks to sell its Magasin du Nord business to raise much-needed funds to cut its £320m debt. The move is an attempt to avoid falling into administration after issuing three profit warnings this year.
But reports emerged over the weekend that Mike Ashley of Sports Direct has threatened to thwart the sale and force the business into administration, so he can buy it cheaply and merge it with House of Fraser.
The claims came after a Sports Direct non-executive director said a takeover of Debenhams had been discussed at board level at the company’s annual meeting last Wednesday. He later said he had been misinterpreted, but his comments prompted intense speculation of a possible merger between the two retailers.
However, a Sports Direct spokesperson denied the claims on Monday. “We want to clarify that we have not been formally approached by Debenhams with details of any offer for Magasin du Nord. We would of course consider any such approach on its merits at the time.
“We do not want to see Debenhams fall into administration, and any suggestion to the contrary is irresponsible and incorrect. As a significant shareholder we would be immediately financially disadvantaged if that were to be the case – quite apart from concern for employees and suppliers.”
Debenhams is currently undergoing a turnaround plan designed to cut costs and boost sales. It called in accountancy firm KPMG earlier this month to provide advice on its next steps and avoid becoming the latest casualty of this year’s retail meltdown.
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