Proactiveinvestors United Kingdom Debenhams PLC https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Debenhams PLC RSS feed en Fri, 24 May 2019 07:45:20 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Debenhams lenders back restructuring plan, leaving 50 stores facing the axe ]]> https://www.proactiveinvestors.co.uk/companies/news/220032/debenhams-lenders-back-restructuring-plan-leaving-50-stores-facing-the-axe-220032.html Debenhams’ creditors have backed a turnaround plan for the collapsed department store chain that will see the closure of around 50 stores.

In an announcement after the market closed on Thursday, the company said its company voluntary arrangement (CVA) had been accepted by a majority that was “significantly above” the required threshold of 75% on each proposal.

READ: Debenhams to remain in the hands of lender consortium as administrator fails to find suitable buyer

"I am grateful to our suppliers, our pension stakeholders and our landlords who have overwhelmingly backed our store restructuring plans," said executive chairman Terry Duddy.

He added that the company would work to preserve “as many stores and jobs as possible” during the process.

Twenty-two of the company’s 166 stores are already due to begin closing this year, potentially resulting in the loss of thousands of jobs. The group is also trying to reduce rents on most of its remaining stores.

The approval of the CVA plans followed news earlier on Thursday that a consortium of lenders had retained control of Debenhams after its administrators had failed to find a suitable buyer for the business.

Celine UK NewCo 1 Ltd, an entity which represents the consortium, said at the time that it had £200mln in fresh funding and was “a committed long-term owner” for the business.

Debenhams collapsed into administration last month under the weight of a £720mln debt pile and was placed under the control of Celine by its administrators.

The group has also joined a number of high-profile bankruptcies on the high street as online shopping, rental payments, and lower customer footfall have all put pressure on the sector.

One of the biggest losers was Sports Direct International PLC (LON:SPD), owned by retail tycoon Mike Ashley, which saw the entire value of its 29% stake in Debenhams wiped out.

The pain is likely to be particularly acute for Ashley, who tried multiple times to install himself as chief executive of the chain through a takeover bid and a £200mln lifeline offer that Debenhams rejected.

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Fri, 10 May 2019 08:02:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220032/debenhams-lenders-back-restructuring-plan-leaving-50-stores-facing-the-axe-220032.html
<![CDATA[News - Debenhams to remain in the hands of lender consortium as administrator fails to find suitable buyer ]]> https://www.proactiveinvestors.co.uk/companies/news/219964/debenhams-to-remain-in-the-hands-of-lender-consortium-as-administrator-fails-to-find-suitable-buyer-219964.html Debenhams in to stay under the control of its lenders after administrators failed to find a suitable buyer for the collapsed department store chain.

Celine UK NewCo 1 Ltd, which represents a consortium of Debenhams lenders, said none of the bids received for the chain had been “at the level required to be taken forward”, and as a result ownership of the group would remain with the group.

READ: Debenhams to close 22 stores next year as part of CVA plan

Stefaan Vansteenkiste, chief risk officer of Celine, said the group was “a committed long-term owner” and had £200mln in fresh funding which it said would be used to finance the company’s “operating turnaround”.

Terry Duddy, Debenhams executive chairman, added that the group was “confident” that its proposals for a company voluntary arrangement (CVA) would be approved and would give the chain “the platform to deliver a turnaround”.

READ: CVAs explained: What is a company voluntary arrangement?

The group has already earmarked 22 of its UK department stores for closure as part of its CVA proposals, with Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney, Wolverhampton all on the chopping block.

The closures are also expected to impact several listed UK retail investment trusts that have exposure to Debenhams stores, including Intu Properties PLC (LON:INTU), Hammerson PLC (LON:HMSO) and British Land Company PLC (LON:BLND).

READ: Mike Ashley's Sports Direct rules out takeover bid after Debenhams enters administration

Debenhams collapsed into administration last month under the weight of a £720mln debt pile and was placed under the control of Celine by its administrators.

One of the biggest losers was Sports Direct International PLC (LON:SPD), owned by retail tycoon Mike Ashley, which saw the entire value of its 29% stake in Debenhams wiped out.

The pain is likely to be particularly acute for Ashley, who tried multiple times to install himself as chief executive of Debenhams through a takeover offer and a £200mln lifeline offer that Debenhams rejected.

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Thu, 09 May 2019 10:03:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219964/debenhams-to-remain-in-the-hands-of-lender-consortium-as-administrator-fails-to-find-suitable-buyer-219964.html
<![CDATA[News - Debenhams to close 22 stores next year as part of CVA plan ]]> https://www.proactiveinvestors.co.uk/companies/news/219195/debenhams-to-close-22-stores-next-year-as-part-of-cva-plan-219195.html Debenhams Group will close up to 22 of its UK department stores next year and more in coming years, if a new restructuring proposal is accepted.

After being put into administration and taken over by its creditors earlier in April, the group revealed plans for a two-part company voluntary arrangement on Friday, which would keep all stores trading at least until January 2020. The group has 166 department stores in total, though its 11 stores in the Republic of Ireland are not affected by the CVA proposal.

The CVA process, which needs to be given the green light by at least half of unconnected creditors at a meeting planned for 9 May, will also involve rent reductions and lease changes on other stores. 

As part of a wider restructuring and turnaround plan, creditors recently provided £200m of fresh liquidity and have committed to equitise £100m of debt, though this will still not result in any value recovery for shareholders of the collapsed Debenhams PLC.

“In order for the business to prosper, we need to restructure the group’s store portfolio and its balance sheet, which are not appropriate for today’s much changed retail environment,” said executive chairman Terry Duddy in a statement on Friday.

Debenhams said the CVA was only seeking to revise terms with of certain landlords and local authorities, stressing that all trade suppliers and the entitlements of employees will continue to be paid in full during the process.

Of the listed UK real estate investment trusts, Intu Properties PLC (LON:INTU) had eight Debenhams stores on its books before the administration, British Land Company PLC (LON:BLND) is thought to have four, Hammerson PLC (LON:HMSO) six stores and Land Securities Group PLC (LON:LAND) three, according to data from Datscha. RDI Reit PLC (LON:RDI) and NewRiver REIT plc (LON:NRR) both own shopping centres with store space leased to Debs, while Aviva (LON:AV.) and Prudential PLC's (LON:PRU) M&G Investments have exposure to three stores leased to Debenhams.

Around 1,200 staff are expected to be affected by the store closures in 2020, with Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney, Wolverhampton all on the chopping block.

For retailers remaining in the apparel sector, analysts expect the withdrawal of store 'capacity' from Debenhams as well as the likes of House of Fraser, New Look, Monsoon and Top Shop owner Arcadia, will be a major boon.

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Fri, 26 Apr 2019 15:21:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219195/debenhams-to-close-22-stores-next-year-as-part-of-cva-plan-219195.html
<![CDATA[News - Debenhams' chief executive set to depart as restructuring process gets underway ]]> https://www.proactiveinvestors.co.uk/companies/news/218566/debenhams--chief-executive-set-to-depart-as-restructuring-process-gets-underway-218566.html Terry Duddy is being lined up for an executive role at Debenhams with chief executive Sergio Bucher expected to step down in the next few days.

The department store chain was bought out of administration last week by its lenders, who are said to be seeking a change at the top.

READ: Mike Ashley's Sports Direct rules out takeover bid after Debenhams enters administration

Duddy took over as Debenham’s non-executive chairman in January when Bucher was voted off the board by Mike Ashley’s Sports Direct group (LON:SPD) though he remained CEO.

Sky News last week reported turnaround specialist Alvarez & Marsal’s managing director Stefaan Vansteenkiste was favourite to replace Bucher, but at the weekend Duddy emerged as a possibility for an interim executive role.

Bucher has been chief executive since October 2016, since when the stock market value of the group has plummeted while the group posted a loss of almost £492mln last year.

The BBC quoted a source close to Bucher that he too felt it was time to move on.

As part of the sale to its lenders, Debenhams received £200mln in funding to enable it to carry on trading.

Before it went into administration Sports Direct said it would make a takeover offer but a condition was that Mike Ashley took over as chief executive, something that was rejected by the Debenhams.

Ashley spent £150mln building up a 30% stake in Debenhams, money it has lost through the pre-pack administration.

Debenhams is the UK’s largest department store chain with more than 160 stores, many of which are expected to close under the lenders’ restructuring plan.

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Mon, 15 Apr 2019 08:27:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218566/debenhams--chief-executive-set-to-depart-as-restructuring-process-gets-underway-218566.html
<![CDATA[RNS press release - Notice to Holders of Debenhams plc notes due 2021 ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409120900_14034543/ Tue, 09 Apr 2019 12:09:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409120900_14034543/ <![CDATA[RNS press release - Administrators appointed to Debenhams plc ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409114003_14034481/ Tue, 09 Apr 2019 11:40:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409114003_14034481/ <![CDATA[News - Mike Ashley's Sports Direct rules out takeover bid after Debenhams enters administration ]]> https://www.proactiveinvestors.co.uk/companies/news/218213/mike-ashley-s-sports-direct-rules-out-takeover-bid-after-debenhams-enters-administration-218213.html Mike Ashley’s Sports Direct International PLC (LON:SPD) has said it does not intend to make an offer to buy Debenhams PLC (LON:DEB) after the troubled department store chain on Tuesday appointed administrators. 

Sports Direct, which owns 29% in Debenhams, was considering a 5p per share cash bid for the retailer and had until April 22 to make a firm offer. However, the FTSE 250-listed retailer has decided against a takeover bid after Debenhams said it has appointed FTI Consulting as its administrators.

READ: Debenhams rejects £150mln lifeline from Mike Ashley's Sports Direct

The administrators have sold the group to a newly-incorporated company controlled by Debenhams' lenders, including hedge funds understood to include Alcentra, Angelo Gordon and Silver Point Capital. That means shareholders, including Sports Direct, will be wiped out.

In a statement following the termination of its bid interest, Sports Direct said that “it will not stop in its quest to get to the bottom of this appallingly managed process and to find and hold to account those responsible for this final turn of events. This is a tragedy. There is no other way of putting it, especially when a long-term solution was there for the taking.”

Mike Ashley commented, "As normal, politicians and regulators fiddled whilst Rome burnt. These politicians and regulators have proven to be as effective as a chocolate teapot. I restate my call for the advisors to go to prison given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners.”

Shares suspended at 1.83p.

Debenhams shares were suspended on Tuesday morning when the company said it would push ahead with a debt refinancing.

Debenhams agreed a deal to secure £200mln in funding from lenders in March but only half was available at that point. The rest of that money was to be released depending on whether Sports Direct launched a firm takeover offer or agreed on the provision of at least £200mln in new funds via a loan or participation in a rights issue.

Sports Direct had offered to underwrite a £150mln rights issue at the weekend, which Debenhams rejected on Monday. The sportswear retailer then raised its lifeline to £200mln on Tuesday morning on the condition that Debenhams' lenders write off £82mln of the retailer's £720mln debt pile.

READ: Debenhams bondholders back refinancing plan in blow to Sport Direct's Mike Ashley

However, the lenders said the offer was "not sufficient to justify" extending the April 8 deadline to prevent a pre-pack administration from going ahead. Sports Direct had made both offers on the condition that Ashley became chief executive of Debenhams. 

Debenhams insisted that stores will continue to trade as normal. It said it would continue to implement the restructuring of its operations, including 50 store closures in the next couple of years, to improve trading performance and deleverage the business. 

Laith Khalaf, senior analyst, Hargreaves Lansdown: “It’s game over for Mike Ashley and Debenhams shareholders. The writing’s been on the wall for some time now, and while Sports Direct persisted with attempts to rescue the retailer, its terms proved unacceptable to Debenhams and its lenders.”

He added: “We can still expect Debenhams to continue trading, though store closures are inevitable as Debenhams cuts its cloth to fit today’s increasingly digital retail environment. Lenders take control of the company for the time being, and a sale process is underway.

“It’s therefore possible Mike Ashley could yet play some role in the future of Debenhams, but he would likely need to pay off large chunks of the retailer’s debt in order to take control, and that’s a hefty price tag to stump up for a company that’s struggling to make ends meet.”

Debenhams in numbers:

• Debenhams floated on the stock market on 9 May 2006 at a price of 195p per share, valuing the company at £1.7bn. Its share price peaked at 207p one day later, on 10 May 2006.

• When it floated in 2006, Debenhams had 120 stores in the UK and planned to expand to 240 stores, it now has 165.

• Debenhams stores have an average lease term of 18 years, and the department store currently has £4.3bn of minimum lease payments over the next 20 plus years under current arrangements.

• Profit before tax peaked in 2011 at £160.3mln. Last year Debenhams posted a pre-tax loss of £491.5mln, but revenues were actually higher than in 2011.

• Gross margins were 19.4% in 2006 compared to 10.2% today.

• Three years ago, Debenhams had a market cap of £900mln compared to £20mln today; that means on average £1mln of shareholder value has been lost every trading day over that period.

 -- Adds comment from further Sports Direct statement --

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Tue, 09 Apr 2019 08:07:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218213/mike-ashley-s-sports-direct-rules-out-takeover-bid-after-debenhams-enters-administration-218213.html
<![CDATA[RNS press release - Suspension Announcement ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409080002_14033836/ Tue, 09 Apr 2019 08:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409080002_14033836/ <![CDATA[RNS press release - Debenhams plc- Update on Refinancing Discussions ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409070250_14033445/ Tue, 09 Apr 2019 07:02:50 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190409070250_14033445/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190408120740_14032780/ Mon, 08 Apr 2019 12:07:40 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190408120740_14032780/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190408120216_14032776/ Mon, 08 Apr 2019 12:02:16 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190408120216_14032776/ <![CDATA[RNS press release - Form 8 (OPD) Debenhams ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190408104508_14032508/ Mon, 08 Apr 2019 10:45:08 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190408104508_14032508/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190405164058_14031390/ Fri, 05 Apr 2019 16:40:58 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190405164058_14031390/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190405163601_14031384/ Fri, 05 Apr 2019 16:36:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190405163601_14031384/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190402094837_14025277/ Tue, 02 Apr 2019 09:48:37 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190402094837_14025277/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190402094437_14025262/ Tue, 02 Apr 2019 09:44:37 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190402094437_14025262/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190401163549_14024191/ Mon, 01 Apr 2019 16:35:49 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190401163549_14024191/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190401115246_14023630/ Mon, 01 Apr 2019 11:52:46 +0100 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190401115246_14023630/ <![CDATA[RNS press release - Rule 2.9 Announcement ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190329164746_14022147/ Fri, 29 Mar 2019 16:47:46 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190329164746_14022147/ <![CDATA[News - Debenhams completes £200mln refinancing but remains open to takeover bid from Mike Ashley's Sport Direct ]]> https://www.proactiveinvestors.co.uk/companies/news/217522/debenhams-completes-200mln-refinancing-but-remains-open-to-takeover-bid-from-mike-ashley-s-sport-direct-217522.html Debenhams PLC (LON:DEB) has completed a refinancing that will provide £200mln in funding to ensure the struggling department chain can continue trading.

The company said it has served a draw down notice for the first £101mln facility but the availability of the second £99mln facility will depend on whether its largest shareholder, Sports Direct International plc (LON:SPD), makes a firm takeover bid or loan offer.

Debenhams warned that shareholders, including Sports Direct, will be wiped out if it uses the second facility.

"We will now move to the next phase of the restructuring of the business, which includes reducing rents and reshaping our store portfolio, as we have referenced in previous announcements. These actions are necessary to ensure the strongest possible platform to support the business going forward," said Debenhams chairman Terry Duddy.

READ: Debenhams bondholders back refinancing plan in blow to Sport Direct's Mike Ashley

Sports Direct, which is run by Mike Ashley and owns nearly 30% of Debenhams, said on Wednesday that it was weighing up a £61.4mln offer to buy the retailer.

Under the 5p-per-share cash offer, Ashley would step down as chief executive of Sports Direct and take the helm of Debenhams.

Debenhams has said it would consider a possible takeover approach but any offer would not address its immediate working capital needs.

“The company therefore had no implementable alternative to its well-developed plans to enter into the facilities in order to protect the interests of its broader group of stakeholders including employees, pension holders, suppliers and lenders,” Debenhams said on Friday.

“By entering into the facilities there is provision for Sports Direct to participate in a comprehensive solution, and we will be contacting Sports Direct to outline once again the terms on which their constructive participation would be possible if they wish to participate.”

The announcement comes a day after Debenhams said a majority of holders of its 5.25% senior notes due 2021 had agreed to change the terms of their bonds, paving the way to complete the refinancing.

The termination of this process with bondholders was a condition of Sports Direct making a takeover offer. 

In a Friday statement, Sport Direct said was now considering its options.

“As the termination of Debenhams noteholder consent process was one of the waivable pre-conditions to the proposal, Sports Direct is giving further consideration to Debenhams' announcement in the context of the proposal," it said.

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Fri, 29 Mar 2019 11:16:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217522/debenhams-completes-200mln-refinancing-but-remains-open-to-takeover-bid-from-mike-ashley-s-sport-direct-217522.html
<![CDATA[RNS press release - £200m refinancing completed ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190329102907_14021324/ Fri, 29 Mar 2019 10:29:07 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190329102907_14021324/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190328094540_14019349/ Thu, 28 Mar 2019 09:45:40 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190328094540_14019349/ <![CDATA[News - Debenhams bondholders back refinancing plan in blow to Sport Direct's Mike Ashley ]]> https://www.proactiveinvestors.co.uk/companies/news/217407/debenhams-bondholders-back-refinancing-plan-in-blow-to-sport-direct-s-mike-ashley-217407.html Debenhams PLC (LON:DEB) shares retreated on Thursday after the struggling retailer announced that it has secured support from bondholders to carry out a £200mln refinancing deal that could wipe out shareholders, including Mike Ashley’s Sports Direct International PLC (LON:SPD).

The department store chain said a majority of holders of its 5.25% senior notes due 2021 had agreed to change the terms of their bonds, meaning it can press ahead with its debt restructuring.

READ: Mike Ashley sets out terms and conditions of possible £61mln cash offer for Debenhams

The announcement will come as a blow to Ashley, who owns nearly 30% of Debenhams through Sports Direct and wants to take control of the company.

Sports Direct on Wednesday said it was weighing up a £61.4mln, or 5p a share cash offer to buy Debenhams in a deal that would include putting Ashley in charge and the termination of the noteholder consent solicitation process.

Debenhams said it would consider any offer that was made but would still carry out a plan to secure £200mln pounds of extra funds from lenders and pursue restructuring options.

The retailer said any takeover bid would not address its immediate funding needs.

Last week, Debenhams warned that its refinancing plan would result in no equity value for its current shareholders, including Sports Direct.

Debenhams shares soared over 50% on Wednesday, following news of Ashley's bid plans, but in afternoon trading today were down 25% at 2.10p.

 -- Adds share price --

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Thu, 28 Mar 2019 09:22:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217407/debenhams-bondholders-back-refinancing-plan-in-blow-to-sport-direct-s-mike-ashley-217407.html
<![CDATA[RNS press release - Update on consent solicitation to bondholders ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190328070022_14018690/ Thu, 28 Mar 2019 07:00:22 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190328070022_14018690/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190327164140_14018378/ Wed, 27 Mar 2019 16:41:40 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190327164140_14018378/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190327163656_14018364/ Wed, 27 Mar 2019 16:36:56 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190327163656_14018364/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190327103400_14017703/ Wed, 27 Mar 2019 10:34:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190327103400_14017703/ <![CDATA[RNS press release - Directorate Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190326113339_14016206/ Tue, 26 Mar 2019 11:33:39 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190326113339_14016206/ <![CDATA[News - Debenhams says any Mike Ashley takeover bid wouldn’t address its immediate funding need ]]> https://www.proactiveinvestors.co.uk/companies/news/217190/debenhams-says-any-mike-ashley-takeover-bid-wouldnt-address-its-immediate-funding-need-217190.html Debenhams PLC (LON:DEB) is to press ahead with its controversial plans to secure a £200mln lifeline from lenders despite Mike Ashley confirming he is weighing up a cash offer for the troubled department store chain.

Ashley, who owns a 30% stake in Debenhams through his Sports Direct International PLC (LON:SPD) business, is desperate to avoid such a refinancing which could all but wipe out existing shareholders.

READ: Debenhams rejects Sports Direct’s bid for Danish business

In an after-hours stock exchange announcement confirming his interest in a takeover, the billionaire said any offer would be “compelling” for existing investors as it would give them the chance to cash in their stakes.

“In Sports Direct's opinion, Debenhams’ restructuring and refinancing process is likely to result in an adverse outcome for Debenhams’ existing shareholders and, accordingly, Sports Direct confirms that, alongside other options, it is considering a possible offer for the entire issued and to be issued share capital of Debenhams not already held by Sports Direct.”

Debenhams bosses said on Tuesday morning that any proposal would be “given due consideration” but added that a takeover offer wouldn’t address the company’s immediate funding requirement.

“Therefore, the company will continue with its plan to obtain the funding required, as outlined in Debenhams' statement of 22 March 2019.”

News of Ashley's interest pushed Debenhams shares up by a third to 2.13p come Tuesday afternoon. 

Not his first grab for power

Ashley, who stands to lose millions of pounds should his Debenhams stake be diluted out of sight, has tried several ways to wrestle control of the retailer.

Last week he made a £100mln bid for the company’s Danish business, Magasin du Nord, but Debenhams bosses rejected the offer, a condition of which was that Ashley was put in charge of the group.

READ: Mike Ashley forced to requisition another meeting of Debenhams shareholders

He has also recently called for a shareholder meeting at which he would ask investors to back his proposal to sack the entire Debenhams board – apart from chief financial officer Rachel Osborne – and appoint him to an executive role.

The 54-year-old was instrumental in getting chairman Ian Cheshire and chief executive Sergio Bucher kicked off the board back in January.

Shortly before then, it had emerged that Debenhams, which has been one of the worst hit by the UK high street malaise, had turned down a £40mln loan offer from the Newcastle United owner.

--Adds background info and share price--

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Tue, 26 Mar 2019 07:40:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217190/debenhams-says-any-mike-ashley-takeover-bid-wouldnt-address-its-immediate-funding-need-217190.html
<![CDATA[RNS press release - Response to proposal by Sports Direct ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190326070525_14015244/ Tue, 26 Mar 2019 07:05:25 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190326070525_14015244/ <![CDATA[RNS press release - Response to proposal from Sports Direct ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190322120417_14012711/ Fri, 22 Mar 2019 12:04:17 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190322120417_14012711/ <![CDATA[News - Debenhams rejects Sports Direct's offer to buy Danish business in return for making Mike Ashley CEO ]]> https://www.proactiveinvestors.co.uk/companies/news/217021/debenhams-rejects-sports-direct-s-offer-to-buy-danish-business-in-return-for-making-mike-ashley-ceo-217021.html Debenhams PLC (LON:DEB) has rejected a £100mln cash offer from Sports Direct International PLC (LON:SPD) to buy the department store chain's Dutch business in exchange for putting Mike Ashley in charge.

The struggling retailer said it believes Sport Direct's approach to buy its Danish department store chain, Magasin du Nord, would not address its funding and restructuring requirement while balancing the interests of all stakeholders.

Debenhams also said there were "obvious concerns" with the proposal that Ashley became chief executive as part of the deal since Sports Direct also owns direct competitor, House of Fraser.

READ: Harrods of the High Street: Ashley's ambition as Sports Direct grabs House of Fraser for £90mln

"Magasin is a key part of the Debenhams group, is cash flow generative and a meaningful contributor to group profits," Debenhams added.

"As such, Magasin is an important part of any lending proposition and therefore any broader solution that protects value for the group."

Ashley, who owns almost 30% of Debenhams through Sports Direct, has been trying to take charge of Debenhams as it struggles with sluggish sales and a mountain of debt. 

Last month, he called for a general meeting to ask shareholders to back his plan to remove the current board and appoint him to an “executive role” at Debenhams.

Debenhams says Sports Direct has ignored guidance on workable solutions 

In his latest grab for power, Sports Direct had proposed buying Magasin Du Nord and giving Debenhams the option to buy back the business after 12 months at the same price it was sold for.

Sports Direct also invited Debenhams to provide "further details of its valuation" if it believes the business is worth more than the offer price.

On its suggestion of putting Ashley in charge, it said: "Sport Direct believes its proposal would provide additional management and first class leadership to Debenhams through this challenging period of restructuring, together with additional funding." 

READ: Mike Ashley forced to requisition another meeting of Debenhams shareholders after initial cock-up

In response, Debenhams said it has remained open to engagement with Sports Direct throughout its refinancing process but the sportswear retailer had "repeatedly ignored" its guidance on what would represent "workable solutions". 

Debenhams said it has continued to make progress with its refinancing discussions with existing lenders and stakeholders while it remains "open to constructive involvement from Sports Direct".

Debenhams seeking £200mln from lenders 

Earlier on Friday, the compay announced it was seeking £200mln of funding from lenders, higher than the £150mln it said it had been looking to raise. 

Lenders have until Thursday next week to approve the cash injection.

The debt restructuring is likely to wipe out shareholders, such as Sports Direct, and hand control of the business to lenders.

"If it proceeds on this course there would no equity value left for existing shareholders. Management is taking pretty drastic action here," said Neil Wilson, chief market analyst at Markets.com.

As of January 5, Debenhams had net debt of £286mln and a committed debt facility of £520mln that expires next year.

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Fri, 22 Mar 2019 09:34:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217021/debenhams-rejects-sports-direct-s-offer-to-buy-danish-business-in-return-for-making-mike-ashley-ceo-217021.html
<![CDATA[RNS press release - Debenhams Plc Announces Consent Solicitation ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190322092423_14012325/ Fri, 22 Mar 2019 09:24:23 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190322092423_14012325/ <![CDATA[RNS press release - Consent solicitation to bondholders ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190322084439_14012260/ Fri, 22 Mar 2019 08:44:39 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190322084439_14012260/ <![CDATA[News - Mike Ashley forced to requisition another meeting of Debenhams shareholders after initial cock-up ]]> https://www.proactiveinvestors.co.uk/companies/news/216933/mike-ashley-forced-to-requisition-another-meeting-of-debenhams-shareholders-after-initial-cock-up-216933.html Mike Ashley has been forced to call for a meeting of Debenhams PLC (LON:DEB) shareholders for a second time after a cock-up in his initial request.

The billionaire owns almost 30% of the struggling department store chain through his Sports Direct International PLC (LON:SPD) retail business.

READ: Debenhams “disappointed” with Mike Ashley’s latest grab for power

Earlier this month, Ashley made a grab for power and called for a meeting where he would ask shareholders to back his plan to remove the current Debenhams’ board and appoint him to an “executive role”.

Any shareholder with more than a 5% stake in a company is entitled to requisition such a meeting.

But because Sports Direct held its share through a third-party nominee account, Ashley’s first requisition was invalid.

The 54-year-old hasn’t given up though and after sorting out the paperwork, has once again called for a general meeting.

"Sports Direct would like the matter of Debenhams board appointments to be put to the vote of the Debenhams shareholders as soon as possible," read a statement.

Debenhams shares edged 0.5% lower to 2.9p on Thursday morning, while Sports Direct fell 0.8% to 285.2p.

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Thu, 21 Mar 2019 10:11:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216933/mike-ashley-forced-to-requisition-another-meeting-of-debenhams-shareholders-after-initial-cock-up-216933.html
<![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190320133002_14009494/ Wed, 20 Mar 2019 13:30:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190320133002_14009494/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190319093621_14007365/ Tue, 19 Mar 2019 09:36:21 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190319093621_14007365/ <![CDATA[News - Sports Direct admits it would seek to acquire Debenhams if it fell into administration - media report ]]> https://www.proactiveinvestors.co.uk/companies/news/216634/sports-direct-admits-it-would-seek-to-acquire-debenhams-if-it-fell-into-administration---media-report-216634.html Sports Direct International PLC (LON:SPD) has admitted that it would seek to acquire Debenhams PLC (LON:DEB) if the department store chain fell into administration, according to a media report.

The Financial Times said on Monday that Chris Wootton, who has been lined up to replace billionaire Mike Ashley as chief executive of Sports Direct should the founder step aside to run Debenhams, told the newspaper that while the administration was “not the outcome we want”, it was a distinct possibility.

READ: Debenhams to give ‘careful consideration’ to Mike Ashley’s latest loan offer

Sports Direct, which last year bought House of Fraser after it fell into administration, is the biggest shareholder in the troubled department store group, with a 29% stake.

Debenhams’ management is currently trying to refinance its borrowings and push ahead with a company voluntary arrangement (CVA) to close 50-60 stores after a string of profit warnings.

Last week, Sports Direct put forward its own refinancing proposal, offering to lend Debenhams £150mln interest-free and with no security if the department store chain agreed to appoint Ashley as chief executive.

"Pre-pack" administration

Holders of Debenhams’ £200mln unsecured bonds are also thought to be considering a “pre-pack” administration of the department stores group that would hand control to lenders without requiring shareholders’ assent, the Financial Times said.

Wootton, who is currently Sports Direct’s deputy chief financial officer told the newspaper: “We’ve put £150m into the (Debenhams) equity, now it’s a penny stock.”

He added: “We’d rather have the share price go back to where it was. It can be pulled back from the brink if immediate action is taken.” 

Sports Direct has already written down £85mln of its investment as Debenhams’ share price has plunged.

In mid-morning trading on Monday, Debenhams shares were 1.7% lower at 3.23p, while Sports Direct shares were flat at 288p. 

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Mon, 18 Mar 2019 10:05:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216634/sports-direct-admits-it-would-seek-to-acquire-debenhams-if-it-fell-into-administration---media-report-216634.html
<![CDATA[News - Debenhams to give ‘careful consideration’ to Mike Ashley’s latest loan offer ]]> https://www.proactiveinvestors.co.uk/companies/news/216445/debenhams-to-give-careful-consideration-to-mike-ashleys-latest-loan-offer-216445.html Debenhams PLC (LON:DEB) has confirmed it will “give careful consideration” to a £150mln interest-free loan offered by Sports Direct International PLC’s (LON:SPD) billionaire boss, Mike Ashley.

It is the latest twist in the retail mogul’s bid to take control of Debenhams, which he already owns 30% of through Sports Direct.

READ: Debenhams’ £40mln cash injection: Stay of execution or genuine lifeline?

Ashley’s proposal, revealed late on Wednesday evening, is conditional on him being appointed as Debenhams’ new chief executive and Sports Direct being issued with an additional 5% stake.

“If the 5% share issue and related "whitewash" was approved by Debenhams' independent shareholders, the £150mln loan would be guaranteed to be interest-free,” read the Sports Direct statement.

“If such approvals were not forthcoming, the loan would bear interest at 3%.”

Sports Direct said £40mln of the unsecured loan would be used to repay the bridge facility that Debenhams agreed with its lenders last month. The remaining £110mln would be available for general working capital.

Debenhams bosses to consider offer

Debenhams confirmed early on Thursday morning that it had received Ashley’s offer and that it was under consideration.

“Any third-party loan offer on these terms would require both the consent of our revolving credit facility lenders and noteholders and material amendments to existing facilities.

“Nevertheless, the board will give careful consideration to the proposal and will engage with Sports Direct and other stakeholders regarding its feasibility in the interests of all parties.”

The retailer, which has issued a string of profit warnings over the past 18 months, is currently working on a refinancing that many in the City expect will comprise a debt-for-equity swap, a new share issue and possibly a company voluntary arrangement (CVA) to reduce its onerous lease obligations.

Ashley, understandably, is keen to avoid such a debt-for-equity swap and share issue as it would dilute his shareholding.

Sports Direct said it envisaged that its proposal would be concluded one way or another by the end of this month.

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Thu, 14 Mar 2019 07:35:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216445/debenhams-to-give-careful-consideration-to-mike-ashleys-latest-loan-offer-216445.html
<![CDATA[RNS press release - Statement in response to Sports Direct proposal ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190314070018_14001546/ Thu, 14 Mar 2019 07:00:18 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190314070018_14001546/ <![CDATA[News - Debenhams in advanced talks for extra £150mln from lenders amid Mike Ashley power grab ]]> https://www.proactiveinvestors.co.uk/companies/news/216154/debenhams-in-advanced-talks-for-extra-150mln-from-lenders-amid-mike-ashley-power-grab-216154.html Debenhams PLC (LON:DEB) said it is in advanced talks with lenders for a £150mln lifeline as Sports Direct’s Mike Ashley tries to take charge of the struggling department store chain.

The company said £40mln of the loan would be used to refinance a bridge facility announced in February to ease restrictions on its existing £286mln net debt.

READ: Debenhams “disappointed” with Mike Ashley’s latest grab for power

Last week Ashley unveiled a plan that would see him leave Sports Direct and take the helm of Debenhams.

Sports Direct is a major shareholder in Debenhams with a 29.7% stake in the group.

Ashley proposed sacking all of Debenhams’ board members except for chief financial officer, Rachel Osborne, and appointing himself to an “executive role”.

He has requisitioned a general meeting where shareholders will vote on the proposals.

Debenhams said it was disappointed by Ashley’s attempt at a boardroom power grab and was looking at its options to strengthen its balance sheet.

Ashley announced his plan after the retailer issued a profit warning earlier the same week, blaming macroeconomic uncertainties, increased financing costs, and additional working capital needs.

READ: Debenhams sinks as it throws out January profit guidance

It marked the fourth profit warning from the chain in the last 15 months, having issued three in 2018 as high street retailers continue to suffer from a shift online as well as a consumer spending squeeze.

In morning trading, shares rose 1.5% to 3.59p.

Analysts at Peel Hunt said: "While the frequency of updates has moved up a notch following the recent moves by Mike Ashley to oust the current board at a forthcoming extraordinary general meeting, we still expect the solution to be driven by a company voluntary arrangement (CVA) and wider balance sheet restructuring, which will involve some form of highly dilutive equity fundraise."

A CVA -- a type of insolvency process that allows a business to close stores and negotiate lower rents on remaining sites -- has been carried out by a number of retailers in the past year including New Look, Carpetright, Mothercare and House of Fraser.

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Mon, 11 Mar 2019 07:26:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216154/debenhams-in-advanced-talks-for-extra-150mln-from-lenders-amid-mike-ashley-power-grab-216154.html
<![CDATA[RNS press release - Refinancing Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190311070011_13996490/ Mon, 11 Mar 2019 07:00:11 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190311070011_13996490/ <![CDATA[News - Debenhams “disappointed” with Mike Ashley’s latest grab for power ]]> https://www.proactiveinvestors.co.uk/companies/news/216065/debenhams-disappointed-with-mike-ashleys-latest-grab-for-power-216065.html Retail billionaire Mike Ashley has made his latest move to take control of floundering department store chain Debenhams PLC (LON:DEB).

The 54-year-old’s Sports Direct International PLC (LON:SPD), which holds almost 30% of Debenhams shares, has requisitioned a general meeting, where it will call for the removal of all Debenhams’ board except for chief financial officer, Rachel Osborne, who joined last September.

READ: Debenhams sinks after latest profit warning

The FTSE 100 group will also ask Debenhams’ shareholders to appoint Ashley to an “executive role” from which he would look to build a “strong board and management team”.

Should investors back the proposals, Sports Direct has said its founder would step down from his current role as its chief executive in order to focus on Debenhams during this “business critical period” for the company.

In the event Ashley does take the reins at Debenhams, Sports Direct’s deputy finance boss, Chris Wooton, would replace him as the discount sportswear retailer’s chief executive.

Debenhams shares surge

Debenhams, which issued its latest profit warning earlier this week, said on Friday morning it was “disappointed” that Sports Direct has taken such action.

It added that it is looking at its options with regards to strengthening its balance sheet, while discussions with lenders over future financing are “well advanced”.

Despite management's disappointment, Debenhams investors reacted positively to the possibility of Ashley taking control of their company.

The stock jumped almost 20% in early deals to 3.6p.

Sports Direct shareholders weren't so enthused at the prospect of losing their main man as the shares slipped 1.1% to 260p.

Not Ashley’s first attempt at a power grab

It is not the first time Ashley has made a grab for power at Debenhams. He was instrumental in getting chairman Ian Cheshire and chief executive Sergio Bucher kicked off the board back in January.

Shortly before, it had emerged that Debenhams, which has been one of the worst hit by the UK high street malaise, had turned down a £40mln loan offer from the Newcastle United owner.

In a letter addressed to CEO Bucher, Ashley vented his frustration that the company did not want his help, suggesting the retailer "has zero chance of survival" without the money.

He has previously spoken of his desire to take control of Debenhams, having rescued rival department store owner House of Fraser last summer.

Investors to take a punt?

No date has been set for the meeting yet, but shareholders could be forgiven for taking a chance on a Mike Ashley-led turnaround.

Debenhams’ own improvement strategy, which involves closing 50 stores and axing thousands of jobs, is costing more than expected and was one of the contributing factors to Tuesday’s profit warning.

Investors have also seen the value of their holdings plunge in recent years, with shares falling 85% last year alone.

As recently as 2015, the stock was trading at upwards of 100p, although it now sits just above 3p, valuing Debenhams at just £37.5mln.

‘Ashley will get what he wants’

“One wonders why Ashley does not simply go the obvious route and bid for Debenhams and combine into the House of Fraser rump,” said Markets.com analyst Neil Wilson.

“The rationale for tying these companies together is clearly compelling. If the coup fails, he will surely launch a takeover. If it succeeds, he will be able to tie up the operational side and shore up finances from his own resources.”

Wilson concluded: “Whether this boardroom coup fails or not, there is surely only one outcome from all of this: Mike Ashley will get what he wants.”

Peel Hunt analyst John Stevenson said Ashley’s move was a “last-minute attempt” to protect his near-30% stake in Debenhams.

“Equity value in Debenhams, including the c30% stake held by Sports Direct, is in jeopardy of being significantly diluted by any forthcoming fundraise and balance sheet restructuring,” he wrote in a note to clients.

--Adds share price, analyst comment and additional info--

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Fri, 08 Mar 2019 07:25:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216065/debenhams-disappointed-with-mike-ashleys-latest-grab-for-power-216065.html
<![CDATA[RNS press release - Response to Sports Direct's requisition notice ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190308070508_13994902/ Fri, 08 Mar 2019 07:05:08 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190308070508_13994902/ <![CDATA[News - Debenhams profit warning leaves analysts wondering 'when, not if' on turnaround plans ]]> https://www.proactiveinvestors.co.uk/companies/news/215839/debenhams-profit-warning-leaves-analysts-wondering--when-not-if--on-turnaround-plans-215839.html Yet another profit warning from struggling department store chain Debenhams PLC (LON:DEB) on Tuesday left many on the market emitting a resigned sigh as analysts turned toward when, not if, a rescue plan would make an appearance.

In a trading update, the company effectively threw out a January statement that full-year profits would be “in line with market expectations”, saying the guidance was “no longer valid”.

READ: Debenhams sinks as it throws out January profit guidance

It is the fourth profit warning issued by the company over the last 15 months as a torrid 2018 saw it post a record annual loss of nearly half a billion and earmark 50 stores for closure, putting thousands of jobs at risk.

The market responded predictably with shares sinking 1.3% to 3.15p in mid-afternoon, although given that the stock has dropped almost through the floor, down 89% in the last year, it only has so much left before rock bottom.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said while it wasn’t clear “quite how badly” the company’s profits had been hit, but an unscheduled trading update rushed out not too long after the last one meant the forthcoming interims “aren’t going to make for pleasant reading”.

Khalaf added that with fewer customers coming through the door, the group would need to rely more on debt to fund itself, adding “further financial pressure”.

“Debenhams’ future is hanging in the balance, and with short sellers circling too, we can expect share price movements to be volatile. The department store needs to stage a Lazarus-like recovery to turn things around from here.”

No interim results date leaves broker expecting imminent news of turnaround

The fact the group didn’t announce a date for its interim results also left analysts at broker Peel Hunt speculating that some kind of salvage effort, either in the form of an equity raise, a company voluntary agreement (where the firm agrees a debt repayment plan with creditors), or a restructuring was likely to come “sooner rather than later”, possibly by the end of April.

The broker slashed its target price by 75% to 1p from 4p, saying that Debenham’s second half would be hit by “working capital challenges and general trading disruption” even before any potential turnaround efforts were taken into account.

Vital signs “weak”, shadow of Ashley looms large

Russ Mould, investment director at AJ Bell, was also pessimistic, saying that even if the company could survive a restructuring it would “end up running to a standstill” unless it could address the reasons behind its declining performance, namely online sales numbers and its burdensome store estate, which currently numbers around 165 in the UK.

Mould added that the renewed troubles would heighten speculation around a possible takeover bid from Sports Direct International PLC (LON:SPD) boss Mike Ashley, who owns a 30% stake in the chain and may look to combine it with House of Fraser, which he rescued from administration last summer.

Ashley has already been throwing his weight around at Debenhams, having offered the group a £40mln loan last year and ousted the chairman and chief executive in a shareholder rebellion in January.

READ: Debenhams turned down £40mln loan offer from Mike Ashley’s Sports Direct - media report

An analyst at a mid-tier investment bank told Proactive that while there was no certainty Ashley would make a bid, Debenham’s would likely “be taking a closer look” at the £40mln loan offer.

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Tue, 05 Mar 2019 15:20:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215839/debenhams-profit-warning-leaves-analysts-wondering--when-not-if--on-turnaround-plans-215839.html
<![CDATA[News - Debenhams sinks as it throws out January profit guidance ]]> https://www.proactiveinvestors.co.uk/companies/news/215802/debenhams-sinks-as-it-throws-out-january-profit-guidance-215802.html Debenhams PLC (LON:DEB) shares sank on Tuesday after the struggling retailer issued yet another profit warning.

In a trading update, the department store said its guidance from a January 10 statement forecasting “profits in line with market expectations” for the full year was “no longer valid” amid macroeconomic uncertainties, increased financing costs, and additional working capital needs.

READ: Debenhams’ £40mln cash injection: Stay of execution or genuine lifeline?

The firm added that in the eight weeks since the January update the decline of its gross transaction value (GTV) had “moderated” with like-for-like sales down 4.6% compared to a 5.7% drop in the first 18 weeks of the fiscal year.

Debenhams also said discussions with stakeholders regarding a £40mln bridge facility to help fund itself were “continuing constructively”.

Sergio Bucher, Debenham's chief executive, reiterated the company’s expectation that it would close 50 stores in the medium-term and that the company’s priority was “to secure the best outcome for the business and all our stakeholders, whilst minimising the number of store closures and job losses”.

The warning marks the fourth profit alert from the chain in the last 15 months, having issued three in 2018 as high street retailers continue to suffer from a shift online as well as a consumer spending squeeze.

Manoeuvring at the top hasn’t helped matter as the chief executive and chairman were both ousted in a shareholder rebellion in January led by Sport Direct International PLC’s (LON:SPD), although Bucher remained in his post but not as a director.

Company has “all but lost its value”

Speaking to Proactive, a retail analyst at a mid-tier investment bank didn’t hold out much hope for the department stores group, saying the Debenhams brand had “all but lost its value”.

They weren’t optimistic about the £40mln funding package either.

“If you’re a creditor, why would you take the risk? The LFLs just keep going backwards”.

The analyst added that while Debenhams may be facing some better comparatives in the next few months against the ‘Beast from the East’ chaos last year, the 2018 summer figures, lifted by the heatwave, would prove much tougher to beat and could be another nail in the coffin.

"It looks like consumer confidence hasn’t really shown signs of rebounding so it’s not a good time to be in the situation that they’re in".

Broker slashes target by 75%

The sentiment was echoed by analysts at broker Peel Hunt, who cut their target price to 1p from 4p and reiterated a 'sell' rating on the stock, saying the real story was "when the group will launch a CVA, equity raise and restructuring plan".

The broker added that with no confirmed date for the company's interim results next month, they believed an announcement would "come sooner rather than later", speculating around the end of April.

In mid-morning trading, shares were down 6.7% at 2.98p.

  -- Adds Peel Hunt comment, updates share price --

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Tue, 05 Mar 2019 09:39:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215802/debenhams-sinks-as-it-throws-out-january-profit-guidance-215802.html
<![CDATA[RNS press release - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190305074530_13990310/ Tue, 05 Mar 2019 07:45:30 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190305074530_13990310/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190301155640_13987863/ Fri, 01 Mar 2019 15:56:40 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190301155640_13987863/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190225164119_13980988/ Mon, 25 Feb 2019 16:41:19 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190225164119_13980988/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190225163642_13980984/ Mon, 25 Feb 2019 16:36:42 +0000 https://www.proactiveinvestors.co.uk/companies/rns/79/LSE20190225163642_13980984/