SPORTS Direct board members have held talks about a possible merger between House of Fraser and Debenhams, a company director has revealed.

Outgoing senior non-executive director Simon Bentley said at the Sports Direct general meeting that a combination had “been discussed”.

He added that the company still has its “hands full” with integrating House of Fraser, which Sports Direct acquired out of administration for £90 million last month.

Sports Direct owns just under 30% of Debenhams, close to the threshold at which it must launch an official takeover bid. Analysts previously suggested that the two department stores should combine to cut costs.

Bentley said: “I was asked a general question about whether or not we discuss our strategic investments, and in particular Debenhams, to which I replied in the positive.

“I made no mention of any merger between House of Fraser and Debenhams, nor did I intend my answer to infer that.”

Shares in Debenhams soared by almost 9% following the admission.

Bentley also announced his retirement from the Sports Direct board earlier yesterday, with Nicola Frampton to join next month.

Long-standing chairman Keith Hellawell also said he would retire, ending his controversial nine-year tenure. He will be replaced by non-executive director David Daly.

Hellawell, a former West Yorkshire Police chief constable and government drugs tsar, fielded criticism after allegations of poor working conditions at the retailer’s warehouses came to light.

His approach to corporate governance has also come under fire and at last year’s AGM he narrowly survived a re-election vote when 47% of investors voted against him.

Steve Turner, assistant general secretary of union Unite, said: “It’s about time he resigned. During his tenure he has presided over shocking working conditions at the Shirebrook warehouse.

“The question now is will his replacement stand up to (Sports Direct chief executive) Mike Ashley in the interests of workers and shareholders?”

Influential advisory groups had urged shareholders to oppose Hellawell’s re-election, arguing he had lost investor confidence and failed to appoint any female directors to the board.

Nevertheless, shares in Sports Direct were 3.7% higher in afternoon trading yesterday at 353.6p.