Retail tycoon Mike Ashley is to send a representative to Debenhams’ crunch creditor meeting today to vote against its CVA proposal, while his plans to create a mini chain of luxury department stores from up to seven House of Fraser branches have been reported.
Ashley, who had owned a near 30% stake in Debenhams was embroiled in a bitter battle to take control of the chain before it was eventually placed into administration last month and bought by a consortium of its lenders.
Debenhams had rejected several take-over offers from Ashley in the lead-up to the administration, which Ashley called “a national scandal”. His stake, and that of other shareholders, was wiped out in the transaction.
He is expected to send a representative to the CVA vote meeting today at which Debenhams will seek support from creditors and landlords to press ahead with plans to close 50 of its 165 stores, with 22 to be closed early next year. See the full list of proposed closures here.
However the CVA is expected to be voted through despite landlords facing 50% rent cuts on the stores proposed for closure and rent reductions of between 25% and 50% on a further 100 stores.
Meanwhile, Ashley, who acquired House of Fraser out of administration last August, is planning to invest millions in turning up to seven its 59 branches into a mini luxury department store chain, called Frasers.
The Guardian reports that the Glasgow branch of the chain, which already trades as Frasers, and a branch in Belfast will among the first to be converted to the new format. The remaining branches in the chain will continue to trade as House of Fraser and appeal to a more mass-market audience.
Ashley has been criticised for allowing some House of Fraser branches to decline since his acquisition with some high profile beauty and fashion brands exiting the chain and more Sports Direct brands moving in. However, Ashley’s empire also contains the Flannels chain of luxury boutiques, which stocks high-end brands from Saint Laurent to Gucci. House of Fraser and Flannels now share a head office in London.
It has been believed that Ashley might consider installing branches of Flannels into some House of Fraser stores. Whether that comes to pass or not, he has always been clear of his intention to use House of Fraser to create what he has dubbed “the Harrods of the High Street”.