Sports Direct boss Mike Ashley is attempting a coup at Debenhams to appoint himself to the board in an executive role and oust nearly all the other directors.
In a dramatic stock market announcement filed late on Thursday, Mr Ashley pledged that, if appointed to the board of the ailing department store, he would step down from his role as chief executive of Sports Direct, in which he holds a majority stake. Sports Direct owns nearly 30 per cent of Debenhams, which has five Irish outlets, including its flagship on Dublin’s Henry Street.
The retail boss said he was calling a general shareholder meeting as he wanted to seize control of Debenhams "during this business-critical period" and all directors would be ousted except for the department store's finance director, Rachel Osborne.
The stock market statement said if successful in his bid to get on the Debenhams board, he would be succeeded at Sports Direct by Chris Wootton, currently its deputy chief financial officer.
It said a fuller statement on Sports Direct’s reasons for calling a Debenhams shareholder meeting in order to install Mr Ashley as boss would follow “in due course”.
Debenhams said: “The board has been engaging with Sports Direct and our other stakeholders and is disappointed that Sports Direct has taken this action. In the meantime, we remain focused on delivering the restructuring of our balance sheet, and our discussions are well advanced.”
Gaining control of Debenhams would be the latest addition to Mr Ashley's empire, which already includes the House of Fraser department store chain, Flannels designer retailer, Evans Cycles and the recently-acquired Sofa. com.
This week the company filed a bid for online shopping specialist Findel, after missing out on attempts to buy cafe group Patisserie Valerie and entertainment retailer HMV. The attempted boardroom coup comes just weeks after Mr Ashley ousted Debenhams's chairman, Sir Ian Cheshire, and demoted the group's chief executive, Sergio Bucher, from the board by teaming up with fellow shareholder Milestone Resources, controlled by the Dubai-based retail billionaire Micky Jagtiani, who owns a 7 per cent stake.
In recent weeks, the Debenhams board has attempted to get Ashley on side by giving him access to limited financial information about the store chain after he signed a non-disclosure agreement. Mr Ashley’s latest shock intervention comes as Debenhams desperately tries to refinance £520 million (€607 million) in debt facilities which are due to be repaid next year. A deal is expected to include a debt-for-equity swap and 50 store closures. Earlier this week, the company issued a profit warning. – Guardian service