Mike Ashley’s spectacularly engineered coup at Debenhams’ AGM sent shockwaves through the industry at the tail end of Super Thursday.

After persuading fellow major shareholder, Dubai-based Landmark, to vote against the reappointment to the board of both chair Sir Ian Cheshire and chief executive Sergio Bucher, Ashley got the result he has been hankering after, thanks, in part, to low voter turnout.

Sir Ian stepped down with immediate effect following the result of the shareholder vote, while Bucher is staying on as chief executive despite not having a seat in the boardroom. Former Home Retail boss and current Debenhams non-executive director Terry Duddy has taken on the role of chair on an interim basis.

“Whatever Ashley chooses to do, there is one interested party likely to be unhappy with the outcome – retail landlords”

It brought an abrupt end to the speculation about how and when Sports Direct founder Ashley would pounce and reveals some of the thinking behind his holding on to a stake in Debenhams just below the formal takeover threshold, despite its value tanking.

But more questions remain unanswered than answered: how Ashley exactly intends to proceed; what his endgame for Debenhams is; and the exact shape the business will take all remain unclear.

Debenhams is at present in discussions, led by chief financial officer Rachel Osborne, with its lenders. The rather large fly in the ointment here is the cloud of uncertainty hanging over the business following Ashley’s intervention, which is likely to spook lenders. Some certainly see future value in the business and will be keen not to allow Ashley’s interests to supersede their own.

However, while the retailers’ loans only mature in 2020 and can be extended, Ashley’s circling makes it hard to see how Debenhams can avoid reaching a critical point sooner or later despite still being cash-generative.

“Debenhams is not really a company that you can really value on the basis of what it’s doing now. Either it will recover or it’s going to go bust,” Whitman Howard analyst Tony Shiret told Retail Week.

Ashley may well gain actual or de facto control of Debenhams.

What he chooses to do with it if that happens will probably go one of two ways. Either it will be merged with House of Fraser and Ashley will exploit the synergies between the pair and merge supply chains, or it could still be run as a competitor to House of Fraser, which could represent an upmarket competitor to a value-driven Debenhams. The former must be more likely given Ashley’s comments so far on the pair working together.

‘Generational opportunity’

While Ashley declined to support either Cheshire or Bucher’s continued membership of the board, he has also made some low-key but complimentary comments on some of the developments executed by the pair, such as the new-look Watford and Stevenage stores.

While those stores outperformed Debenhams’ dismal core performance this festive season, they are a drop in the ocean when compared to the rest of its tired estate. Whatever Ashley chooses to do, there is one interested party likely to be unhappy with the outcome – retail landlords.

“Mike views this as a generational opportunity,” Shiret said about Ashley’s desire to drive down rents. The uncomfortable fact, not only for landlords but for much of retail, is that Ashley is perhaps unique in his power to do so.

Not so long ago, Ashley was regarded as a maverick but somebody whose brash and controversial public persona often outshone his political astuteness. This daring coup makes it clear that assumption is no longer relevant.