A radical rescue plan to try to save ailing department store Debenhams may be tabled in the coming weeks that would involve the closure of more than half of its stores and the loss of 10,000 jobs.
Chief executive Sergio Bucher, who was ousted from the board last week but who remains with the business while reporting to its board, is reported to be planning to propose the three-stage turnaround programme to its lenders in the coming weeks, according to The Telegraph. The business had previously said it would look to close 50 of its 165 stores but the number has been upped to 90, the newspaper reports.
The news emerges after Mike Ashley’s Sports Direct used its near 30% stake in the business to block the re-election of chairman Sir Ian Cheshire and to have Bucher removed from the board. Retail veteran Terry Duddy is now acting at the chain’s chair on an interim basis. Ashley made his move at the retailer’s annual meeting after it had revealed like-for-like sales dipped by 3.4% in the six weeks to 5 January.
Ashley had criticised the business for turning down a prior offer to lend it £40m to aid its turnaround and he may yet block any refinancing proposal, which could prove to be a fatal blow for the company.
Last August Ashley snapped up rival department store House of Fraser, when it fell into administration, and is in the process of saving as many of its 59 stores as possible. The tycoon is said to have harboured a long-term ambition to merge the two department store chains.