Debenhams demise ‘a national scandal’ says spurned Ashley
‘Tale of woe from start to finish’
Debenhams crashed into administration yesterday, putting thousands of jobs at risk.
On another bleak day for the high street the 241- year- old chain collapsed under the weight of a £720million debt pile.
It has been taken over by its lenders who will embark on a major cull likely to include the closure of at least 50 stores and the loss of 4,000 jobs.
shareholders, who include sports Direct tycoon mike ashley, have been left with nothing. he said the collapse was ‘a national scandal’ and blamed lenders, including UK banks and Us hedge funds.
‘as normal, politicians and regulators fiddled whilst Rome burnt,’ he said. ‘These politicians and regulators have proven to be as effective as a chocolate teapot. I restate my call for the advisers to go to prison given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners.
‘While 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.’
The 54-year-old owned a near 30 per cent stake – at one stage worth £150million – and had launched a series of failed rescue bids including a merger with his house of Fraser chain.
Debenhams, which has 166 stores and 26,000 staff, had racked up a record loss of £491.5million following a disastrous Christmas.
Consumer groups warned that customers with store cards and vouchers could lose out. ‘Debenhams has long been a staple of the high street so this is a worrying time for its customers and they may find their consumer rights are affected,’ said eleanor snow of Which?
‘If you have gift vouchers or have bought something you are intending to return do this now as you may not be able to do so if the store ceases trading.’ bricks-and-mortar retailers have been hammered by skyhigh rents, crippling business rates and the onslaught of online rivals. Debenhams chairman Terry Duddy said: ‘It is disappointing to reach a conclusion that will result in no value for our equity holders. however, this transaction will allow Debenhams to continue trading as normal; access the funding we need; and proceed with executing our turnaround plans. We remain focused on protecting as many stores and jobs as possible.’
Debenhams was taken over by a consortium in 2003 for £600million. This saddled it with debts and onerous leases by the time it was returned to the stock market with a value of £1.7billion. Laith Khalaf, senior analyst at hargreaves Lansdown, said: ‘as an investment, Debenhams is a tale of woe from start to finish. ‘Its share price peaked just one day after flotation in 2006, and shareholders now face being wiped out entirely.’ sue Dunn, a retail expert at sRLa Consulting, said: ‘ We need to hope that they can make enough changes to keep quite a loyal customer base in high streets still shopping with them.’