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House of Fraser responds to Debenhams deal speculation

UPDATED: House of Fraser chairman Don McCarthy said he has not received any approach from Debenhams despite reports the rival department store was considering an acquisition of some or all of the department store chain.

In an interview with Drapers this morning McCarthy refused to rule out a possible sale of the business but stressed that House of Fraser was in “good health” and was not being touted around the market.

However House of Fraser has since issued a statement in which it said that it, “Currently had no intention of selling any of its 62 stores.”

The statement added: “The department store continues to be in a strong financial position.The group is trading ahead of plan and is seeing sales on an improving trend with positive growth in the last 12 weeks. It is business as usual for House of Fraser.”

“At close of business, June 15, 2009, the group had cash at bank in excess of £85m and further available working capital facilities of £36m. This is sufficient to meet all its obligations for the foreseeable future.  The group repaid £59.8m of debt in its last financial year (year ended January 24, 2009) and to date has repaid/ cancelled over £140m of facilities arranged at the time of the acquisition. The business remains fully compliant with all of the conditions contained within its banking agreements.”

In the interview with Drapers this morning McCarthy said: “There’s always speculation but there haven’t been any discussions about it [a sale to Debenhams]. They’ve [Debenhams] got some money and people think about what they think would be a good fit.”

He added: ”If someone thinks we are a target for an acquisition they need to come and talk to us.”

A report in The Times newspaper today suggested that Debenhams was considering acquiring some or all of House of Fraser’s stores. Last week Debenhams raised more than £300 million through a share placing which it said would help it to “pursue opportunistic acquisitions”.

There has also been speculation that high rents on House of Fraser stores could be putting pressure on the retailer. McCarthy denied that House of Fraser’s rents were a causing problems.

A spokeswoman for Debenhams declined to comment on the speculation about House of Fraser but said: “The recent fund raising has improved our position to pursue opportunistic acquisitions.”

Other sources told Drapers that Debenhams was unlikely to “move in on” House of Fraser in its current form.

 

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