Mike Ashley could use a lesson in subtlety after Debenhams
Britain's leading retail maverick Mike Ashley is known for using intemperate language – but in his reaction to the collapse of long-term target Debenhams yesterday, he excelled himself.
Ashley issued a statement in which he savaged politicians and regulators for being “as effective as a chocolate teapot”, and called for advisers on the deal to be sent to prison. In the circumstances, it is right to ask what purpose such language serves.
It is becoming clearer by the day that strong words from Ashley are not necessarily matched by his actions. He wanted control of what was once Britain’s proudest store chain, but he wasn’t prepared to make a full bid for it.
He offered a £150m cash injection, upped at the last minute to £200m, falling well short of what the Debenhams directors considered viable.
One reason why the Debenhams directors turned down Ashley’s offer is that they did not want him to be chief executive. Is it any wonder, when he cannot be relied upon to speak of major issues in a measured manner?
And Debenhams is a major issue indeed, with the future of thousands of jobs and more than 100 high street departments at stake.
Ashley has lost his 30 per cent stake and analysts largely agree that the billionaire’s most appropriate move now would be to end this particular chapter while he still can. But given he chased House of Fraser for half a decade before snapping it up last summer, it is hard to predict whether he will call it quits.
For Debenhams, the short term future is likely to be a story of store closures and lease negotiations. Long-term, the retailer needs to work out what its brand offers that others do not.
Look into almost any Debenhams shop window today and it is likely you will see a big sticker saying "Sale". The firm’s lack of confidence in being able to justify selling products at full price, whether rightly or wrongly, has been a huge part in its downfall.
As for Ashley, if he is to continue his pursuit, perhaps he might consider offering more substance and less bombast. His talent for generating heat too often comes at the expense of shining a light.