Hiding in plain sight
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.