Sports Direct founder and Debenhams’ largest shareholder Mike Ashley has vowed to “save as many Debenhams stores and jobs as I can” in an explosive stock exchange announcement.
Ashley, who held a 29% stake in the department store retailer and made multiple attempts to instate himself as chief executive of the business before it fell into administration today, has hit out at the chain.
A statement from Sports Direct said that the retailer’s lenders had planned to seize control of Debenhams via a pre-pack administration as early as last autumn, and that the Debenhams board has “unwittingly or otherwise” played its part “through incompetence, or worse, through collusion”.
“This is nothing short of a national scandal - and one that could so easily have been avoided if Debenhams had chosen to engage with its largest shareholders constructively rather than obstructively,” said Sports Direct.
Debenhams was put up for sale this morning after lenders took control of the department store group through a pre-pack administration. The deal “included provisions for a group sale process to be launched immediately”, with the sale process to be conducted by Lazard.
If Debenhams is sold, lenders will be first in line to recover their money, while shareholders, including Ashley, are unlikely to receive anything.
Ashley also blamed politicians and regulators for Debenhams’ fate, who he said “fiddled whilst Rome burned”.
“These politicians and regulators have proven to be as effective as a chocolate teapot. I restate my call for the advisors to go to prison given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners,” said Ashley.
“Whilst these hedge funds look to close a significant number of stores and put thousands of people out of work, as politicians and regulators look on, I will go to the ends of the Earth to save as many Debenhams stores and jobs as I can, similar to the promise I made with regards to House of Fraser.
“While there may be some short-term cost to Sports Direct and our shareholders, sometimes you have to do the right thing, something the board of Debenhams and the hedge funds have manifestly failed to do.”
Ashley called for the relevant authorities “to reverse the administration process so that a full, better and appropriate solvent solution can be found”.
“This solution would include allowing myself and appropriate senior Sports Direct management access to detailed information to save the business for all stakeholders,” he said.
“The board of Debenhams and its advisers have sought to stifle and exclude us from their so-called process and have undermined and blocked our various offers of assistance as they carried out their underhand plan to steal from shareholders.”
Ashley, who already owns department store rival House of Fraser, has been seeking to seize control of the retailer since late last year.
He succeeded in forcing chair Sir Ian Cheshire out of the business and chief executive Sergio Bucher from the board at its AGM in January.
Since then he agitated for control of the business, pledging to either make an offer for Debenhams or underwrite an equity issue if he were made chief executive. He continued to push for the departure of the rest of the Debenhams board, aside from chief financial officer Rachel Osborne.
In recent weeks, his campaign escalated as he demanded that members of Debenhams’ board take a lie detector test and declared that the business’ advisers should be in prison.
Analysis: What next for Debenhams?
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Mike Ashley labels Debenhams administration ‘national scandal'