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Frasers Group Revives Rescue Talks for Debenhams

Frasers Group’s Michael Ashley is hoping the third time’s the charm when it comes to bankrupt department store Debenhams.

The British retail bigwig is again in talks to rescue the chain’s U.K. business from a likely liquidation.

Ashley has had his sights on owning Debenhams for quite some time. He actually owned a 30 percent stake, valued at $199 million, back in 2019, but saw that get wiped out when the retailer was taken over by lenders. He tried to execute a $150 million pound ($199.6 million) takeover bid last year, but got the brush-off from Debenhams. When the company fell into administration again in April, a year after last year’s insolvency, Ashley revived his offer to buy the retailer out of bankruptcy. He even upped the offer to 125 million pounds ($166.7 million), but subsequently declined to match the 300 million pound ($400.1 million) target price that insolvency advisors wanted for the chain.

India’s Reliance Retail was in talks in September and JD Sports in November, but both eventually walked away from the negotiating table. Ashley is once again hoping his “hail Mary” will be a last-ditch effort to keep the 240-year-old chain alive and kicking

Things might be more complicated this time around, however.

The company issued a statement confirming the talks, but then said: “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.”

Debenhams operates 124 doors in the U.K., and employ about 12,000 workers. It also has 45 franchised stores across the Middle East, Southeast Asia and Eastern Europe, but the future of those stores will depend on whether a buyer for the U.K. business can be found. Liquidators have already been called in and they are planning to begin liquidation sales after the holidays, with a wind-down of store operations by March.

The retailer’s Debenhams Ireland subsidiary, which operated department stores in the Republic of Ireland, ceased operations in April when Debenhams fell into administration. It has another subsidiary in Denmark, which operates the department store chain Magsin du Nord. The Danish subsidiary operates independently and is not impacted by the U.K. insolvency.

Ashley, best known for his ownership of Sports Direct International, isn’t a stranger to rescuing beleaguered department store chains. He also nicked the department store retailer House of Frasers from bankruptcy, after which he renamed his conglomerate Frasers Group.