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Former Marks and Spencer boss Lord Stuart Rose has warned Mike Ashley over plans for a retail ‘oligopoly’, following his attempted acquisition of embattled department store chain Debenhams.
According to a report by Aol.com, Rose said he would “think twice about building an empire of high street chains”, and he told the Press Association (PA) that Ashley’s strategy “risked leaving his empire inflexible in a fast changing market”.
Rose told the PA: “My view in retail is to stay nimble, lean and mean. You need to be able to turn on a sixpence. I wouldn’t want to lock myself into anything that’s not flexible – we’re operating in a fast moving world.”
It comes as Ashley made a move to take control of Debenhams in March, and announced plans to remove all the directors, except Rachel Osborne who was appointed in September 2018, and appoint himself to the board in an executive role.
Ashley, who holds a 30% stake in the department store chain, pledged in a stock exchange announcement that if he was appointed he would step down from his current role as a director and chief executive of Sports Direct.
However, Debenhams entered pre-pack administration last week (9 April), and has gone into the control of its lenders following its rejection of Sports Direct’s offer to underwrite £150m equity issuance.
The pre-pack administration will see all of the company’s shareholders – including Sports Direct which has a 30% stake – wiped out and lose their investments.
At the time, Debenhams chairman Terry Duddy said: “We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.
“In the meantime, our customers, colleagues, pension holders, suppliers and landlords can be reassured that Debenhams will now be able to move forward on a stable footing.”
Sports Direct rescued Evans Cycles after it fell into administration on 7 September, and acquired House of Fraser in August 2018 for £90m in a deal that came just minutes after the department store chain entered administration. It also acquired Sofa.com for a “nominal sum” in February of this year, adding yet another business to Ashley’s growing portfolio of high street retailers.
