Debenhams (DEB) urges watchdog to intervene in Mike Ashley coup attempt. Competition concerns raised about potential concentration of control in hands of one man. Shares in the ailing department store rose nearly 16% on Friday, or less than half a penny to 3.53p, after Ashley used a stock market announcement to call a Debenhams shareholder meeting to oust nearly all its directors and install himself as chief executive. It is understood that Debenhams has raised concerns with the Competition and Markets Authority (CMA) about the potential concentration of control in the hands of Ashley, whose empire owns House of Fraser and a near-30% stake in Debenhams. Half of Debenhams shoppers also shop in House of Fraser, which stocks 90% of the rival department store group’s beauty offering. Both chains also stock the same fashion brands including Phase Eight, Oasis, Ted Baker and Coast. Jonathan Branton, a competition specialist at law firm DWF, said competition authorities could get involved even if Sports Direct did not launch a formal takeover bid for Debenhams. “If this looks like acquisition of control the CMA will want to have a look at it carefully under merger control rules,” he said.
Ocado Group (OCDO) could face customer exodus after Marks & Spencer Group (MKS) deal, poll suggests. Survey shows many shoppers loyal to Waitrose and don’t see M&S as ‘adequate replacement’. On Friday, a note by HSBC’s retail analyst David McCarthy revealed the opinions of 250 Ocado shoppers on the deal, views which he described as “worrying” for the two listed companies. Just over a fifth said they would not shop with Ocado if Waitrose products were not available. A “meaningful proportion” said their loyalty was to Waitrose and that M&S was not an adequate replacement. M&S is buying half of Ocado’s UK retail business for £750m in a deal that will result in its food replacing Waitrose products on the Ocado website in 2020. Ocado has played down the risk of losing customers from its 720,000-strong base after the brands switch over. But McCarthy warned heavy customer losses would hit the bottom line if his straw poll turned out to be representative of that base. “The profit implications could be severe due to operational gearing and low profits,” he wrote. “If the joint venture lost sales … losses could rise sharply.”
