Hid­ing in plain sight

The Daily Telegraph - Business - - Business Comment -

At least Mike Ash­ley is no longer pre­tend­ing about his in­ter­ests in bedrag­gled Deben­hams. As many sus­pected, the Sports Di­rect ty­coon is lick­ing his lips at the op­por­tu­nity to swoop on the depart­ment store chain on the cheap should it tum­ble into ad­min­is­tra­tion. Given the high street’s weak Novem­ber per­for­mance and the fact that Deben­hams is run­ning yet another round of promotions just a week af­ter its Black Fri­day dis­count­ing frenzy, the signs are not look­ing good for its sur­vival.

Ash­ley is also moot­ing a merger with House of Fraser. In­dus­try bankers have talked up the prospects of a merger for years. Back then it was rub­bished as akin to two drunks prop­ping each other up. Now a merger could be the only thing that keeps the two depart­ment stores on life sup­port. Ash­ley reasons a merger could mean they would share buy­ing and sourc­ing op­er­a­tions, which would make them more ef­fi­cient. But it still doesn’t solve the prob­lem of whether the depart­ment store model is bro­ken for good. Deben­hams ar­gues that if Ash­ley wants it, he’s wel­come to make a takeover bid. But for a man fond of rum­mag­ing in the bargain bins of re­tail, he’ll never over­pay if he doesn’t have to.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.