Mike Ashley told Debenhams: Put me in charge now!
BILLIONAIRE Mike Ashley attempted to install himself as chief executive of Debenhams as part of repeated efforts to gain control of the retailer, it has emerged.
The approach to Debenhams’ chairman Sir Ian Cheshire last summer was one of several made by Ashley, including a separate plan to anoint himself chairman.
Tensions reached fever pitch last month when the firm rejected a £40 million loan from Ashley, who owns rival department store chain House of Fraser and Sports Direct. The loan could have given him control if the chain had entered financial difficulty.
The department store’s board has repeatedly warned Ashley, Debenhams biggest shareholder, that his proposals would jeopardise the interests of other shareholders, stakeholders and creditors.
But sources said the rebuttals angered the billionaire, who has seen the value of his shareholding in Debenhams plunge as the shares fell.
The revelations come at a key time for the retailer. It needs to renegotiate leases and debts soon as part of a restructuring. It is likely to want to complete that before the next quarterly rents are due at the end of March, or face a more painful restructuring that could involve a partial insolvency, known as a CVA. Last month, in an interview with The Mail on Sunday, Cheshire said he had told Ashley that he needed to buy the firm if he wanted to take full control.
Cheshire left suddenly last Thursday after Ashley used his near 30 per cent stake to oust him in a shareholder vote. He also used the vote to force chief executive Sergio Bucher off the board. Bucher has said he will stay on in his role running the stores.
The other major shareholder to rebel was Dubai-based Milestone Resources. It is run by the wife of Micky Jagtiani, a former London taxi driver and now a billionaire who has previously been rumoured to want to buy the chain.
The repeated coup attempts have been a growing distraction to negotiation, and the revelation is likely to alarm shareholders, many of whom have watched Ashley’s attempts to seize control with increasing irritation. One City source described Ashley’s overtures to the firm as ‘management by hand grenade’, while others expressed concern that the owner of a rival was able to undermine a direct competitor in this way.
Last week, Debenhams told shareholders at its annual meeting that like-for-like sales in the UK had fallen 3.6 per cent in the six weeks to January 5.
When contacted by The Mail on Sunday, Ashley said: ‘No comment, my friend. Thanks a lot.’
However, the retail mogul released a statement on Friday that read: ‘If Debenhams does fail, the responsibility for that will rest solely with the Debenhams board.’