Mike Ashley's Frasers Group in last-ditch rescue talks with Debenhams

7 December 2020, 08:08 | Updated: 7 December 2020, 08:17

Mike Ashley's Frasers Group has confirmed it is in last-ditch talks with Debenhams to save the department store's UK's operations.

Frasers said on Monday it is in a “potential rescue transaction” but conceded time is short.

It added the recent administration of Topshop-owner Arcadia, which is also Debenhams' biggest concession holder, has complicated things further.

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In a statement, Frasers said: "The company confirms that it is in negotiations with the administrators of Debenhams' UK business regarding a potential rescue transaction for Debenhams' UK operations.

"Whilst Frasers Group hopes that a rescue package can be put in place and jobs saved, time is short and the position is further complicated by the recent administration of the Arcadia Group, Debenhams' biggest concession holder.

"There is no certainty that any transaction will take place, particularly if discussions cannot be concluded swiftly."

Debenhams set to close putting 12,000 jobs at risk

Frasers finance boss Chris Wootton had signalled over the weekend that his company might be interested in a deal for Debenhams in an interview with the Sunday Times.

"We hope to be able to save as many jobs as possible," he told the paper. "However, we have found that Debenhams has been overly reliant on Arcadia for many years, and, with the administration of Arcadia last week, as well as no end in sight to the outdated business rates regime which unduly punishes the likes of Debenhams, it may be a bridge too far."

Last week saw a bloodbath on the high street as both Debenhams and Sir Philip Green's Arcadia, which owns Topshop and Burton among others, were put at risk.

Retail expert explains what has led to Arcadia's fate

Arcadia tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores.

JD Sports then pulled out of the potential rescue deal with Debenhams, which operates 128 UK stores, putting 12,000 jobs at risk.

The 242-year-old retailer has already cut 6,500 jobs across its operation after it entered administration for the second time in 12 months.

The department store chain said last week its administrators had "regretfully" decided to start winding down operations while continuing to seek offers "for all or parts of the business".