Debenhams and House of Fraser Merger Rumours Denied

Published on: 13 Sep, 2018
Updated on: 18 Sep, 2018

Reports of board-level discussions of a merger between Debenhams and House of Fraser, who have the two largest stores in Guildford, have been played down today by the Sports Direct non-executive director Simon Bentley.

Sports Direct owns 30% of Debenhams and bought House of Fraser last month for £90 million, less than three hours after it went into administration.

Yesterday, Bentley, who will soon be leaving Sports Direct, was quoted as saying that a merger “had been discussed” but today (September 13, 2018) he is reported to have said: “I was asked a general question about whether or not we discuss our strategic investments and in particular Debenhams, to which I replied in the positive.

“I made no mention of any merger between House of Fraser and Debenhams, nor did I intend my answer to infer [sic] that.”

Any merger between the two stores is likely to increase further speculation on the likelihood of both stores being able to survive in Guildford.

Today shares in Debenhams fell back by 7% following a statement from Sports Direct that it had no intention of making an offer.

Debenhams shares had also fallen earlier in the week and although it has confirmed that some store closures will occur it has been denied that it was considering a company voluntary arrangement (CVA), a form of insolvency that enables a business to exit unwanted properties and negotiate rent reductions.

Around 200 jobs are believed to be at stake at the Guildford branch.

Meanwhile, Guildford Borough Council continues negotiations with John Lewis in relation to the North Street regeneration project. Many residents are said to favour John Lewis’ presence in the town, one of the most affluent in the UK, but it has suffered a 99% slump in half-year profits, a spokesperson saying its department stores are being squeezed by the “most promotional market we have seen for almost a decade”.