A bump in the road as Sports Direct looks across the Irish Sea...
Mike Ashley's Sports Direct will not be expanding its Irish presence with a purchase of the beleaguered Debenhams Retail (Ireland).
Instead, the Irish Independent understands that Debenhams itself is the preferred bidder for the chain's Irish arm.
Sports Direct founder Mike Ashley – known to football fans as the controversial owner of Newcastle United - already holds a 10.5% stake in the Debenhams group.
He has been making moves across the Irish Sea in recent times.
Sports Direct bought the department store chain Heatons earlier in the year, while last month it acquired the old Bowers store on Dublin's North Earl Street.
Debenhams' 11 stores in the Republic were put into examinership in mid-May, putting 2,000 jobs at risk as the company struggled to reduce costs.
The move created fresh problems, as a dispute erupted between Debenhams Ireland and the Roche family who had sold its trading business to the company a decade prior.
The Roches have retained the retail properties on Dublin's Henry Street and Patrick Street in Cork, thus drawing them into the examinership legal conversation as Debenhams seeks to renegotiate upward-only rents on its stores.
Richard Roche accused Debenhams of filing a “tainted” examinership application based on an “incomplete and inaccurate” picture of its finances.
His chief argument was that the two properties generate 40% of Debenhams’ Irish revenues and that Debenhams itself sublets space in Henry Street to the Spanish retailer Zara for a high rent.
Debenhams Retail (Ireland) wants to repudiate at least three of its rental leases.
While it had sales of €166m last year, it has lost €22.6m over the last three years. Its total annual rent roll is €25m, while staff costs come to €36.6m annually.