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Retail Sector

Frasers Group in talks to buy collapsed UK department store chain Debenhams

But a deal is unlikely to affect the department store chain’s former Irish businesses.

BRITISH RETAIL GROUP Frasers is in talks to buy collapsed UK department store chain Debenhams out of administration.

Frasers is headed by Mike Ashley, the owner of English Premier League football club Newcastle United who has a track record of purchasing major retailers that have fallen from great heights.

In a statement, Frasers said that while it hoped to reach a deal with administrators of Debenhams, the outlook was complicated by the demise of Topshop owner Arcadia Group last week.

Arcadia is the biggest concessions operator in Debenhams’ stores.

“The company confirms that it is in negotiations with the administrators of Debenhams’ UK business regarding a potential rescue transaction for Debenhams’ UK operations,” Frasers said in a brief statement.

“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 moved to wind down its Irish operations in April with the loss of around 2,000 jobs, shortly before its UK parent collapsed into administration.

Administration is a process in the UK whereby a seriously troubled company drafts in outside expertise to try and salvage at least parts of the business.

But in a statement last week, the UK administrators said that they are now moving to liquidate the company.

 Irish landlords

It’s not clear if a purchase by Frasers would affect the 11 former Debenhams stores in the State.

Those premises were leased to the UK company Debenhams Plc. When it collapsed, a number of the chain’s Irish landlords initiated High Court proceedings against the company over unpaid rent.

Some of those leases — on flagship premises like Debenhams’ former Henry Street store — have been since been terminated.

So a sale of the UK arm to Frasers wouldn’t automatically see the Ashley-owned group taking control of the former Irish stores.

Frasers could, however, negotiate a separate deal with the chain’s Irish ex-landlords to take over some or all of the premises.

Ashley has, in recent times, looked to increase his group’s footprint, opening a SportsDirect megastore in the former Boyer’s building off Dublin’s O’Connell Street in 2017.

In 2015, he bought a majority stake in Irish retailer Heatons before fully acquiring the following year.

The Frasers group also includes Ashley’s Sports Direct chain of shops as well as high-end clothing retailer Flannels and video-game outlets Game.

Debenhams, which had already been shedding thousands of jobs before the pandemic, currently employs around 12,000 staff in the UK.

Arcadia’s near-collapse risks up to 13,000 jobs.

Additional reporting by Ian Curran

© AFP 2020.

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