Reports emerging over the weekend that Mike Ashley will attempt to block a sale of Debenhams’ Magasin du Nord business have been denied by Sports Direct.
Debenhams is believed to be in the process of selling off its Magin du Nord brand for £250 million in order to raise much-needed funds for the troubled department store.
Claims that Ashley has threatened to halt the sale have been quashed by Sports Direct, who said that Debenhams had not formally approached Sports Direct with details of the sale, adding that “we would of course consider any such approach on its merits at the time”.
“We do not want to see Debenhams fall into administration, and any suggestion to the contrary is irresponsible and incorrect,” a spokesperson told City A.M on Sunday evening.
“As a significant shareholder we would be immediately financially disadvantaged if that were to be the case – quite apart from concern for employees and suppliers,” they added.
Sports Direct was forced to issue a statement earlier in the week confirming that it did not intend to make a bid for Debenhams, despite amassing an almost 30 per cent stake in the department store in the past few years, just beneath the mandatory takeover threshold.
Debenhams is currently undergoing a turnaround plan in order to cut costs and boost sales after issuing three profit warnings this year.
The retailer is looking for around £250 million for Magasin du Nord, which trades from six locations across Denmark, according to documents being circulated among potential buyers.
After it purchased the Danish retailer for just £12 million in 2009 following the collapse of its previous owner, Magasin du Nord has improved its financial performance, posting underlying profits of £26.6 million on sales of £326 million last year.