LENDERS have seized control of Debenhams after the company was placed into administration.

The move wipes out the stake held by Sports Direct tycoon Mike Ashley in the business, and those of all other shareholders.

It also cancels plans for an emergency shareholder meeting in which Mr Ashley was to seek his appointment to the board and attempt to oust most other directors.

Administrators at FTI Consulting were appointed to the retailer, the flagship store in Brighton’s Churchill Square, just before 10am yesterday and immediately sold the group’s operating companies to a new entity owned by its lenders.

Chairman Terry Duddy said: “This... will allow Debenhams to continue trading as normal; access the funding we need; and proceed with executing our turnaround plans.”

Debenhams - which has 166 stores and employs 25,000 people has been struggling for a number of months, with debts of £640million and three profit warnings issued last year. 

It has also announced plans for around 50 stores to close in the next couple of years, with the outcome of this to be decided by rent costs and negotiations with landlords in respective areas of the country.