Debenhams plc (lon:deb)
HMV, Debenhams And Mike Ashley/House Of Fraser

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Title: HMV, Debenhams And Mike Ashley/House Of Fraser
Company: DEB - Debenhams plc
Share Price Then: 4.8p
Author: Ian Smith
Date: Sat 29 Dec 2018
Comments: With the news that HMV are in administration again it would be easy to say that this is the end for them, but to my mind both Mike Ashley and Debenhams should be queuing up to buy them, both Debenhams and House Of Fraser have a lot of space not yielding the required profit margins so dropping HMV in as either HMV or an in house brand seems to make a lot of sense.

I don’t understand how Mike Ashley with his 30% stake in Debenhams has failed to take control and with there being such a difference between the current share price of about 5p and the year high price of 35p he is unlikely to want to purchase any more shares and be forced into offering to buy the rest at 35p.

Give it another 6-12 months and this obligation could become much less onerous but would it be too late?

So who gets HMV would suggest to me the fate of Debenhams and if you have the nerve then Debenhams could be a great buy.

If Mike Ashley gets it and integrates it into Debenhams then it seems likely that he is aiming for control of Debenhams.

If Mike Ashley gets it and integrates it into House of Fraser then it would suggest a lack of interest in Debenhams and their future is in the hands of the current management.

If Debenhams gets it then it would be a real boost for the current management’s credibility and the stores future prospects

If neither gets it then I would be really surprised because there is still a massive market for CDs and DVDs which may be shrinking too much for a specialist store but not for a section in a more general store.
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