Mike Ashley has been rebuffed by Debenhams after he provided a £40m mortgage to bail out the struggling division retailer amid hypothesis it had “zero probability of survival”.
In a letter to Debenhams chief govt Sergio Bucher, Mr Ashley stated he was making the provide at a “important time” after the excessive road was hit by what he known as “the worst November in residing reminiscence”.
Mr Ashley, whose Sports activities Direct enterprise already owns a 30% stake in Debenhams, stated he was “extraordinarily pissed off” at his provide being rejected.
He stated the Debenhams board “would not actually appear to understand the place that Debenhams is presently in and their duty to shareholders”.
Particulars of the letter, first reported by the Day by day Telegraph, emerged as Sports activities Direct reported a 27% fall in half-year earnings because it counted the price of rescuing one other division retailer chain, Home of Fraser, this summer season.
Shares in Sports activities Direct fell nearly 15% by the shut whereas Debenhams slipped by 5%.
Mr Ashley instructed buyers that some retailers have been prone to be pushed over the sting after the gloomy buying and selling circumstances seen final month.
“It’s going to actually smash them to items,” he stated.
Debenhams stated: “We welcome Sports activities Direct’s proposal as a transparent demonstration of their willingness to help the corporate.
“Nevertheless, because the provide got here with circumstances that might have an effect on the pursuits of different stakeholders, whereas the board doesn’t assume it may settle for the proposal, as offered, it has invited Sports activities Direct to interact as a part of our broader refinancing course of.”
In his letter to Mr Bucher, Mr Ashley pointed to hypothesis about Debenhams’ difficulties with suppliers and credit score insurance coverage and that “moreover it’s speculated that the corporate presently has zero probability of survival”.
“What we’re providing is a really public assertion of help at a important time for the Debenhams enterprise,” he wrote.
“If I am sounding extraordinarily pissed off – effectively I’m. We have seen this earlier than, with Blacks and HoF.
“They did not need any assist both. We do not wish to see Debenhams fail.
“It isn’t in our curiosity to see it fail however with out one thing altering quickly all the shareholders threat getting worn out.”
Debenhams reported a £492m annual loss in October – the most important in its historical past – because it outlined plans to shut as much as 50 shops and take “decisive motion” to safe its future.
Mr Ashley earlier this month instructed Sky Information that Home of Fraser – the corporate he purchased out of administration for £90m over the summer season – may very well be merged or “ought to no less than work very carefully collectively” with Debenhams.
Half-year outcomes for Sports activities Direct revealed on Thursday confirmed underlying pre-tax earnings for the six months to 28 October fell to £64m in comparison with £88m a 12 months in the past.
The outcomes confirmed that the Home of Fraser enterprise had notched up a lack of £31.5m for the reason that takeover in August whereas Sports activities Direct had additionally injected £70m into its provide chain.
Mr Ashley stated there have been “important challenges forward” in turning round its fortunes.