12,000 jobs could go when the retailer stops trading out of its 124 stores.

12,000 jobs could go when the retailer stops trading out of its 124 stores.

Frasers Group has made a last-ditch attempt to rescue Debenhams days after was announced the chain would start winding down operations as it prepares for a liquidation process in the new year.

Administrators said last week Debenhams would go into liquidation in the new year after it failed to find a buyer.

It entered administration for the second time in April in order to protect the company against claims from creditors during the Covid-19 pandemic.

Around 12,000 jobs could go when the retailer stops trading out of its 124 stores.

JD Sports backed out of a rescue deal when news of the liquidation broke. It reportedly began talks in November with an interest to acquire the entire chain.

Frasers meanwhile made a bid to acquire the Arcadia Group last week as it collapsed into administration. Its bid was rejected.

Reports had begun earlier this year that Frasers was looking to take up to 30 Debenhams sites in the case of store closures.

In a statement to the London Stock Exchange today (7 December), Frasers Group said: "The company confirms that it is in negotiations with the administrators of Debenhams' UK business regarding a potential rescue transaction for Debenhams' UK operations. 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, Debenhams' biggest concession holder. There is no certainty that any transaction will take place, particularly if discussions cannot be concluded swiftly."

Commenting on the potential deal, Greg Lawless at Shore Capital said: "For Fraser Group this is its last play having seen his cGBP150m equity stake wiped out this year when Silver Point Capital (US hedge fund) took control. Frasers' went on to offer loans to Debenhams, on condition that it became Debenhams, where it failed in its attempts to grabble ownership. 

"Any deal with Frasers Group would probably see a portfolio of Debenhams operated under a 12-month licence. We also wonder how many Debenhams stores that will survive long term, alongside Fraser Group's House of Fraser fascia. Many of the stores sit adjacent to each other. We believe that JD Sports walked away having considered the issues, noting that the capital expenditure required and increased execution and reputational risks would come to the fore.

"Frasers is known to be a hard negotiator and will probably walk away rather than overpay. It has a history of acquiring distressed brands, acquiring House of Fraser for GBP90m (with cGBP500m of stock); such decisiveness is 'aided' by a majority shareholder with a c64% stake."