British retail group Frasers is in talks to buy the United Kingdom activities of failed department store chain Debenhams, it announced on Monday, December 7.
Debenhams and Topshop owner Arcadia, two of Britain’s biggest clothing retailers, are on the brink of collapse owing to coronavirus fallout and fierce online competition, endangering 25,000 jobs.
Frasers is headed by Mike Ashley, owner of English Premier League football club Newcastle United and renowned for purchasing major retailers that have fallen from great heights.
In a statement, Frasers said that while it hoped to reach a deal with administrators of Debenhams, the outlook was complicated by the demise of Arcadia, which is the biggest concessions operator in its stores.
“The company confirms that it is in negotiations with the administrators of Debenhams’ UK business regarding a potential rescue transaction for Debenhams’ UK operations,” Frasers said in a brief statement.
“Whilst Frasers Group hopes that a rescue package can be put in place and jobs saved, time is short and the position is further complicated by the recent administration of the Arcadia Group.”
Administration is a process whereby a seriously troubled company drafts in outside expertise to try and salvage at least parts of the business.
In recent times, Ashley has rescued British department store chain House of Fraser.
The Frasers group also includes Ashley’s Sports Direct chain of shops as well as high-end clothing retailer Flannels and video-game outlets Game.
Debenhams, which has already been shedding thousands of jobs ahead of and during the pandemic, currently employs around 12,000 staff – mostly being paid by the government under its COVID-19 furlough scheme.
Arcadia’s near-collapse risks up to 13,000 jobs. – Rappler.com
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