Ashley targets empty Debenhams stores in rescue blow

RETAIL tycoon Mike Ashley is considering moving his brands into empty Debenhams stores as part of a deal to acquire the company and its online division, sources have told The Mail on Sunday.

The speculation has prompted fears that a full rescue of Debenhams is becoming increasingly unlikely, with mass store closures on the cards in the coming weeks.

The empty store strategy would let Ashley more easily convert Debenhams outlets to other brands in his Frasers group, which include House of Fraser, Sports Direct and luxury brand store Flannels.

The process of taking what landlords call ‘vacant possession’ would also mean he could avoid redundancy costs for existing staff.

Debenhams, which is being run by administrators at FRP, is running a massive sale to clear £10 million of stock a day as it prepares to close stores if a deal with Ashley or another buyer is not struck.

The department stores are being run on highly unusual short-term leases, many lasting just 12 months. The complex arrangements mean a buyer such as Ashley would have to renegotiate with each landlord to keep the stores going. It is not yet clear how many Debenhams outlets Ashley would take or how many empty shops are on the cards.

If Ashley struck a deal to take 30 to 40 leases, the mass closure of about 90 Debenhams stores next month would still be likely, with stores packaged off for use by other retailers or redeveloped.

One insolvency expert monitoring the process closely said: ‘Ashley is the last man standing. It’s clear he wants some of these stores but not what’s in them. If you are going to do it like that, to start from scratch, why would you want to take on these stores now when stock is running out and all that’s left is the liability for paying the redundancy cheques in January?’

No one from Frasers was available for comment. Sources said Ashley was in the Maldives.