24th Jan 2014 14:39
LONDON (Alliance News) - The chief executives of Debenhams PLC and sports retailer Sports Direct International PLC met this week, for the first time since Mike Ashley's sports company bought up the struggling department store chain's shares two weeks ago, The Times reported on Friday.
Sport Direct surprised the markets twice last week, buying a 4.6% stake in Debenhams on Monday the 13th and pledging to work with it to improve its performance, only to sell the entire stake on Thursday the 16th. Sports Direct instead entered into a put option agreement for a 6.6% stake in Debenhams, which will activate if Debenhams shares fall below a certain level in the future. It said maximum exposure to the option is about GBP64 million.
The aggressive move suggests Ashley expects Debenhams' turnaround to take some time, with shares falling further in the meantime.
Michael Sharp of Debenhams met Sports Direct's David Forsey this week to discuss how the two retailers might work together, according to The Times. Ashley is understood to have not attended the meeting, the paper said.
Forsey is understood to have used the meeting to outline Sports Direct?s desire to sell its products through Debenhams stores, including a wide range of its main sportswear brands, as well as some of its celebrity-sponsored and designer ranges, such as Slazenger, Dunlop and Kangol, The Times reported.
Debenhams declined to confirm to Alliance News whether a meeting took place, while Sports Direct was not immediately available for comment.
Shares in Debenhams were trading 0.6% lower at 78.15 pence Friday afternoon, while Sports Direct International shares were down 0.4% at 702.90 pence per share.
http://www.thetimes.co.uk/tto/business/industries/retailing/article3983711.ece
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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