Reliance Retail, the retail group headed by India’s richest man Mukesh Ambani, is reported to have pulled out of the running to buy troubled department store chain Debenhams.
According to reports this weekend, Reliance, which owns historic British toy store Hamleys, has exited the process but a number of other parties remain interested.
Debenhams was placed into administration for the second time in the space of a year at the start of lockdown, which its investors said would give it protection to get through the pandemic.
A sale process, headed by Lazard, was undertaken to give it an exit route from administration but the business has re-opened most of its stores (more than 120) since lockdown and it claims to be trading well, though a number of its costs, such as rates and rents, have been cut or paused.
The business is currently owned by a consortium of its investors, who bought it out of administration in Spring 2019. Known as Celine, the consortium includes American hedge funds Silver Point Capital and Golden Tree Asset Management, as well as Barclays.
Restructuring firm Hilco has been lined up to act as liquidator for the business should it not be sold, but this has been described as a precautionary move.
Meanwhile The Sunday Times reports that any new owner of Debenhams may not inherit its flagship Oxford Street store as the site is owned by Ramsbury, the investment vehicle of Sweden’s richest man Stefan Persson, who is said to be keen to exercise a break clause in the lease at the end of the year and is seeking a temporary tenant ahead of a redevelopment.
Mike Ashley, chief of the Frasers Group, is said to be interested in the Oxford Street site. Ashley has also been reported to have been interested in acquiring a number of Debenhams sites but his group complained of having been frozen out of the process to buy the chain by its investors who had made any negotiations conditional upon its signing an NDA and not speaking to its landlords for 18 months.
It is said the investors were concerned Frasers would use the exercise to cherry pick sites but Frasers finance chief Chris Wootton denied this was the case saying at the time: “We are not going to buy a business without knowing how stores are performing. We have a track record of buying businesses and we are the most likely party to save jobs.”
Frasers already occupies a number of prominent sites on Oxford Street including large units for Sports Direct, Flannels and House of Fraser.