Debenham's shares soar after Ashley's push for executive role
THE market has reactively positively after Mike Ashley, one of Britain's most famous and unorthodox businessmen, launched a coup to take charge of ailing department store chain Debenhams.
Mr Ashley (54) is seeking to remove most of the board and install himself in an executive role.
Shares in Debenhams, which have lost 97pc of their value since a peak in 2015, jumped in early trading and were up 14pc late morning yesterday.
The billionaire owner of Newcastle United football club made his fortune from building retailer Sports Direct. More recently he has snapped up stakes in other chains hit by the rapid shift online and weak consumer spending.
He holds 30pc of Debenhams, once Britain's biggest department store. Late on Thursday, Mr Ashley said he was willing to step down as CEO of Sports Direct if shareholders at Debenhams backed his push to remove all but one of the current board members and install himself as an executive.
Analysts said he was trying to take control of the company without buying the 70pc he does not already own. There was surprise that Mr Ashley was willing to step back from the top job at Sports Direct, where he owns a 61pc stake.
"If Mr Ashley were to be appointed to the board of directors of Debenhams during this business critical period... Mr Ashley would carry out an executive role and would focus on the Debenhams business," Sports Direct said.
Mr Ashley's request for an investor meeting comes only days after Debenhams, which dates back to 1778, warned on profit again, saying its restructuring was complicating its efforts to trade.
Debenhams said it was "disappointed" that Sports Direct wanted the board changes, adding that it has been engaging with stakeholders in its bid to restructure its debt and close stores to guarantee its survival.
Debenhams has become vulnerable to a takeover since it failed to keep up with rivals in the shift to sell online.
Mr Ashley has in recent years pounced on other weak retailers, including store chain House of Fraser and analysts have speculated that he could merge them. At Debenhams he has already joined forces with another retail investor to oust the chairman and remove the CEO from the board, a highly unusual approach.