Could Debenhams finally have a white knight in JD Sports?
The sportswear retailer reportedly is interested in acquiring the U.K. department store chain, which would include 124 doors. Debenhams has been in bankruptcy since April, and has been trying to find a buyer since. JD’s executive chairman Peter Cowgill is believed to be considering an acquisition of the entire business.
Others reportedly in the running for parts of the operation include Marks & Spencer for some locations and The Hut Group for Debenhams’ website.
A few weeks ago, Michael Ashley of Frasers Group, whose Sports Direct International is a long-time JD competitor, had put in a bid of $125 million pounds ($166.7 million), but dropped out when the asking price hit $300 million pounds ($400.1 million).
Ashley has a long history with Debenhams.
April’s insolvency was Debenhams’ second bout within one year. It was taken over by lenders—U.S. hedge funds Silver Point and Golden Tree, and others that include global asset management firm Alcentra Group and British investment bank Barclays—in April 2019. The filing last year wiped out the investment made by Ashley. That investment totaled 150 million pounds ($199 million). He also had considered a takeover bid last year, but reportedly got the brush off from Debenhams.
Debenhams was among the first of many fashion chains and brands that fell into administration in the U.K. due to the coronavirus outbreak. British apparel and home furnishings brand Laura Ashley filed in March, and its assets, primarily its intellectual property, has been acquired by Gordon Brothers. More recently, Edinburgh Woollen Mill has slipped into administration, followed a few weeks later by the value department store chain Peacocks, both part of the umbrella of assets owned by Edinburgh Woollen Mill Group.