Mike Ashley’s Frasers Group Plc is in last-ditch talks to buy the ailing Debenhams department store in a move which could save thousands of jobs.

The owner of the Sports Direct brand confirmed it was in negotiations in an emailed statement and said “we hope to be able to save as many jobs as possible” at Debenhams, one of the UK’s most iconic retail brands.

News of Ashley’s interest comes just a few days after Debenhams said it could have to liquidate the business after talks with JD Sports Fashion Plc ended. Debenhams has been struggling for many years, weighed down by costly stores with hefty rents and large property taxes.

The failure of Debenhams, which employs 12,000 people, capped a terrible week for British retail after Philip Green’s Arcadia Group, the owner of the Topshop and Dorothy Perkins brands, filed for insolvency putting 13,000 jobs at risk.

Debenhams has 124 stores, all rented, and if a deal is completed Frasers could operate them on a 12-month license while determining how many stores could be saved, said a person familiar with the matter who declined to be identified as the matter is confidential. Debenhams declined to comment on the talks with Frasers Group.

The person said any deal with Frasers would have to be better than the liquidation value of Debenhams and negotiations with FRP Advisory, the administrator that has been in control of the department store since April, were likely to centre on a value of around the £280 million ($376 million).

If Ashley succeeds in his negotiations, first reported by The Sunday Times, it will be the culmination of a long and troubled involvement with Debenhams. Once its biggest shareholder, his stake was wiped out when lenders, including American hedge fund Silver Point Capital, took control of the chain last year. Ashley is estimated to have lost about £150 million.

Frasers group held talks earlier this year with the administrator of Debenhams but claimed then it had been “frozen” out of the process and was not receiving adequate information.

Frasers already owns the House of Fraser chain, another department store, which it also bought out of administration, providing potential synergies if he were to merge the two.

No agreement is certain, however. The reason JD Sports pulled out of a deal to buy Debenhams was the failure of Arcadia, which is one of the biggest concession partners of Debenhams. Although Debenhams has used the pandemic and the current retail crisis to renegotiate its rents on much more favourable terms, it still has a heavy bill for business rates, a form of UK property tax.

“We have found that Debenhams has been overly reliant on Arcadia for many years,” said Chris Wootton, financial director of Frasers, in an emailed statement. “As well as no end in sight to the outdated business rates regime which unduly punishes the likes of Debenhams, it may may this a bridge too far for the Frasers Group.”

By Deirdre Hipwell