// Mike Ashley calls for clean sweep of the Debenhams board and proposes installing himself as an executive
// Comes two months after he successfully led a boardroom coup to oust the chairman and CEO
// Sports Direct already has a stake in Debenhams of just under 30 per cent
Mike Ashley has set in motion a plan to seize control of Debenhams after he called for a clean sweep of the board and proposed installing himself as an executive.
In a stock market announcement after trading closed last night, the billionaire – who is the founder and majority owner of the Sports Direct retail empire – called for a general shareholder meeting to vote whether he should take “an executive role” at the embattled department store chain.
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- Debenhams eyes 60 job cuts at support centres
- Debenhams chairman Sir Ian Cheshire voted off the board
- Debenhams disappoints with 3.4% drop in Christmas like-for-likes
- Internal assessment determines Debenhams is a “viable business”
- Debenhams to close 50 stores & cut 4000 jobs amid biggest loss in 240-year history
He also proposed to to remove “all of the current members of the Debenhams board”, except for finance chief Rachel Osborne.
If successful, Ashley would be replaced as chief executive of Sports Direct by deputy finance chief Chris Wootton in an acting capacity.
A statement read: “If Mr Ashley were to be appointed to the board of directors of Debenhams during this business-critical period for Debenhams, Mr Ashley would carry out an executive role and would focus on the Debenhams business, including building a strong board and management team.”
The dramatic coup comes just two months after Ashley successfully led a coup to oust Debenhams chairman Sir Ian Cheshire from the boardroom. Cheshire subsequently resigned.
The coup also saw Sergio Bucher ousted from the boardroom, but he was permitted to continue carrying out his duties as Debenhams chief executive.
Debenhams has expressed “disappointment” at Ashley’s proposals.
“The board has been engaging with Sports Direct and our other stakeholders regarding options to restructure our balance sheet and is disappointed that Sports Direct has taken this action,” it stated.
“In the meantime, discussions to address our future funding requirements are well advanced.”
The news follows Debenhams’ latest profit warning earlier this week – the fourth in just over a year.
In addition, last month it secured a cash injection of £40 million from lenders after enduring a disappointing Christmas trading season.
In its full-year results published last October, Debenhams unveiled a historic £491.50 million statutory loss and announced plans to close up to 50 stores within three to five years, putting an estimate of 4000 jobs at risk.
At the moment, the tracksuit tycoon owns a 29.7 per cent stake in Debenhams through Sports Direct.
Late last year, he slammed the retailer for rejecting his £40 million interest-free loan offer in order to save it from collapsing, in exchange for more shares in the company.
While Ashley’s offer of a loan was largely interpreted as an attempt to take over, it instead sparked a bitter and public dispute between himself and Debenhams board.
Ashley had steadily increased his stake in the department store chain throughout 2018, raising it from 23 per cent to the current 29.7 per cent.
This means Sports Direct is only three percentage points from the threshold at which it must launch an official takeover bid.
Ashley has made no secret about his ambitions to expand Sports Direct, leading the firm through an acquisition spree in recent months.
The company bought key House of Fraser, a key Debenhams rival, and Evans Cycle out of administration, and won a bid to takeover Sofa.com.
He also made a bid to buy HMV out of administration earlier this year, but failed, and shelved his ambitions to acquire Patisserie Valerie.
The firm also has significant stakes in Findel and French Connection.
It is widely speculated that Ashley will also look to pounce on Debenhams when he feels the time is right.