JD Sports in the running to rescue Debenhams
JD Sports is in the running to acquire Debenhams and is said to be a serious contender to land the struggling department store.
According to The Sunday Telegraph, the retail giant, which also owns the Size?, Footpatrol and Go Outdoors chains, has been examining Debenhams' finances in a secure data room.
A previous deadline for bids for Debenhams, which is currently in administration, has been extended in light of the new lockdown in England.
The revelation about JD's interest comes shortly after rival retail group Frasers, headed by Mike Ashley and parent of Sports Direct and House of Fraser, pulled out of the race to buy Debenhams.
Frasers Group finance chief Chris Wootton accused advisers to Debenhams – the sale process is being handled by Lazard – of freezing the group out of the process and providing insufficient information for it to make a bid in the realm of the asking price, which is said to be £300m.
Debenhams currently operates 124 stores and the most valuable parts of its business are said to be its website and its beauty operations.
Marks & Spencer and Next are said to be interested in some, but not all, of its stores. Next has already taken over a number of former Debenhams sites to launch its new Beauty Hall by NEXT concept. The online beauty and lifestyle group, The Hut Group, is said to have placed a bid for the Debenhams website.
JD's interest will give hope to Debenhams' 12,000 staff that many of its stores could be saved. However Hilco has been lined up in the background as a precautionary measure to act as liquidator should a deal with any prospective buyer fail to be reached.
Debenhams is owned by a consortium of its investors, lead by Silver Point Capital and collectively known as Celine. The consortium bought the business in a pre-pack administration deal in Spring 2019 have rebuffed several bids from Mike Ashley's Fraser Group at that stage. It has not been ruled out by industry watchers that the consortium may yet buy back the business again.
JD Sports was given a boost on Friday evening when the Competition Appeals Tribunal overturned a block on its acquisition of smaller rival Footasylum.
The tribunal argued that the CMA had not acted rationally in blocking the deal, did not follow up on inquiries with suppliers and failed to properly assess the likely impact of the Covid-19 pandemic in its decision.
It also found that the CMA did not fully understand the increased ability of Nike and Adidas to sell products directly to customers, which affected the decision making. The case will now go back to the CMA for reconsideration following the judgement.