In a potential rescue arrangement that could grow its reach on the U.K. high street, Frasers Group said it is in talks to purchase the Debenhams department store company from administrators, The Irish Times reported.
Frasers said it hopes that a deal can be struck and that employment positions at Debenhams can be retained. However, it warned that "there is no certainty that any transaction will take place, particularly if discussions cannot be concluded swiftly,” per the news outlet.
Last week, administrators for the department store chain said it would be wound down, and that all locations would be shuttered following 242 years in operation.
The news came after Arcadia Group, Debenhams' largest concession operator, fell into administration. Arcadia comprises roughly 5 percent of Debenhams' sales.
Enforced closure amid COVID-19, along with the migration to eCommerce, has pummeled a number of U.K. merchants. Mike Ashley’s Frasers Group, however, has had an outlook for expansion even with the pandemic.
Ashley has purchased much of Britain’s high street in recent years. He owns 64 percent of Frasers Group in addition to the Newcastle Football Club. Ashley reportedly wants to turn Frasers into the “Selfridges of sport.” Frasers had bought shares in Hugo Boss, the German fashion company and the high-end brand Mulberry.
Earlier this year, Debenhams was reportedly seeking relief from landlords for five months of rent as it foresaw challenges from the continuing pandemic. The chain experienced two insolvency events last year.
Debenhams stores are concentrated on main streets and are in the heart of shopping centers, which have been most impacted when it comes to traffic and frequency of visits during the pandemic.
In October, news surfaced that coronavirus cases were beginning to jump in the U.S. and globally, triggering a new tide of limitations and closures throughout Europe as leaders aim to keep the virus in check.
