Good morning, it's Paul here.



Mello London

David Stredder's team have been working hard to put together 2 events, back to back, in May 2019. The location is in Chiswick again, which was an excellent venue last time.

Mello Investment Trust & Funds - this should be an excellent one-day event on Wed 15 May.

The line-up of speakers & exhibitors looks superb - lots of very interesting insights, I imagine.


Mello 2019 - the main, 2-day Mello event is back (also in Chiswick) on Thu 16 & Fri 17th May. Previous attendees will know how well-organised, friendly, and interesting these events are. As usual, Graham and I will be in attendance, chatting to all & sundry about shares! Hope to see you there.



Debenhams (LON:DEB)

Share price: 3.06p
No. shares: 1,227.8m
Market cap: £37.6m

Series of announcements

Let's recap on the situation with this struggling department store chain.

Trading update (profit warning) - earlier this week, on Tuesday, the company issued a profit warning. To summarise it;

  • LFL sales still negative, at -5.3% in H1
  • Discussions ongoing to restructure balance sheet (i.e. equity/debt fundraising)
  • Statement from 10 Jan 2019 that trading in line with expectations is no longer valid (it didn't seem credible to me at the time)
  • Still expecting to close c.50 stores in the medium term
  • Needs support of landlords & local authorities, to reduce rent & rates liabilities - this is the crux of the situation, and I don't see any alternative to a CVA or administration - hence it's very difficult to see any value in the existing equity.


Sports Direct statement - major shareholder, headed by Mike Ashley, has put in a requisition to sack almost the entire board. Bizarrely, Ashley has offered to take over as CEO of Debenhams, on a full-time basis - i.e. relinquishing his role at Sports Direct.

It's difficult to take this seriously, since Ashley seems to be doing so many deals at the moment, buying up various struggling retailers, that you wonder how he could possibly take on a role as big as running Debenhams on top of everything else.

It also brings into question the massive conflict of interest. Presumably he wants to buy Debenhams and merge it with House of Fraser. The only realistic way to…

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