India’s richest man eyes up Debenhams acquisition

India's richest man eyes up Debenhams acquisition
Mukesh Ambani is among the small number of interested parties in discussions with advisors about acquiring part or all of Debenhams.
// India’s richest man Mukesh Ambani reportedly expresses interest in buying Debenhams
// He is the retail mogul behind Reliance Retail, the same company that owns Hamleys
// Debenhams has been up for sale since July, as part of its administration process

India’s richest man has reportedly emerged as one of the suitors looking to make a bid to acquire embattled department store chain Debenhams.

According to Sky News, Mukesh Ambani is among the small number of interested parties in discussions with advisors about acquiring part or all of Debenhams, which has been up for sale since July as part of its administration process.

Ambani is the chairman, managing director and the largest shareholder of Reliance Industries, which owns Reliance Retail – the same retail empire that owns British toy retailer Hamleys.


Despite the reports, there is no certainty Ambani’s expression of interest in Debenhams would develop into a formal bid.

Speculation has been rife that Next, Fraser’s Group, and a Chinese consortium have also mulled the possibility of snapping up Debenhams, which has been under administration since April.

Meanwhile the heritage department store chain has reportedly kicked off a sale process for Magasin du Nord, its Danish retail business, in a bid to generate between £150 million and £200 million.

Investment firm Lazard has been overseeing the sale process of Debenhams’ core business in the UK, and had asked interested buyers to submit offers by 5pm on September 1.

However, the deadline passed with no immediate resolution, with reports earlier this month suggesting it was only a “checkpoint” to confirm if there was interest in a rescue deal.

Debenhams reportedly wanted to strike a deal by the end of this month otherwise it would start exploring other options, prompting speculation that the retailer was on a cliff edge of sorts.

In addition, last month restructuring firm Hilco Capital was drafted in to work on “contingency plans” for Debenhams, should a sale or any other rescue be unsuccessful and it falls into liquidation – a last resort that would place more than 12,000 jobs at risk.

Chairman Mark Gifford has since poured cold water on the rumours, telling BBC News earlier this month that Debenhams was far from the brink of collapse and insisted that trading has been better than expected since lockdown ended.

He added that Debenhams has more than £95 million in the bank – more than £50 million higher than it had expected to have at this point when it went into administration in April.

Gifford also stressed that Debenhams was in no rush to reach a deal by the end of this month, although he conceded that it was likely the retailer would remain in administration until early next year.

Even if a sale is agreed, one of the potential scenarios reportedly being discussed by buyers is liquidating more than half of Debenhams’ store estate – leaving it with 60 sites – due to an unlikeliness of bidders wanting to take on the entire business as it currently stands.

When Debenhams entered administration at the height of the coronavirus lockdown in April, it marked the second such insolvency process within a year.

However, this time it’s a “light touch” administration, meaning directors are still running the retailer rather than handing it all over to the administrators.

Debenhams permanently shut down 20 stores and slashed an estimated 6500 jobs since the pandemic gripped the UK in March – 2500 of which was confirmed in August.

In months leading up to the lockdown, Debenhams had around 140 stores and was in the midst of a CVA restructure, which it launched soon after the first administration.

The CVA led to several store closures immediately after the peak Christmas trading season.

Debenhams now trades from 124 stores in the UK, plus another 45 sites across 17 countries in Europe, the Middle East and Asia under various franchise agreements.

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