Reliance Retail pulls out of Debenhams rescue race

India’s Reliance Retail has pulled out of the race to buy Debenhams as the embattled department store chain battles to secure its future.

Mukesh Ambani controlled Indian conglomerate had emerged as a surprise bidder for the retailer in September but has now dropped out of the auction, according to reports.

Reliance had emerged as the leading bidder to rescue Debenhams, which plunged into administration for the second time in a year in April. But Reliance Retail, which bought the iconic London toystore Hamleys in May 2019, is no longer involved in the Debenhams sales process, the reports said.

Debenhams has around 12,000 employees and more than 120 stores in the UK. If it fails to find a buyer it will go into liquidation – though the company has said there are ‘multiple parties’ in the race.

Sales at the 242-year-old retailer have been higher than expected during the pandemic, both online and in stores, buying it extra time.

But sites in major cities have struggled and the retailer may leave its Oxford Street flagship store and headquarters when a deal is completed.

Debenhams was last year taken over by its creditors, including hedge funds Silver Point Capital and Golden Tree Asset Management.