Published: Mon, January 14, 2019
Economy | By

Debenhams chairman and its CEO ousted from board by Mike Ashley

Debenhams chairman and its CEO ousted from board by Mike Ashley

Cheshire said: "It has been a great privilege to get to know my Debenhams colleagues over the past three years".

Once the UK's biggest department store chain, Debenhams has reported a string of profit warnings as it failed to keep pace with consumers moving online and to cheaper outlets, hammering its shares and wiping 80 percent off its market value.

In a highly unusual move, the company said it had asked Bucher to remain as CEO and report to the board because they believed in his strategy. He was appointed chairman in April 2016.

Digital sales rose 6 per cent over the six-week period, despite a slower start to the peak shopping season.

The company said it had not ruled out any options, include an insolvency process that could be used to speed up a plan to close up to 50 stores over the next five years.

The Sports Direct tycoon ousted Sir Ian Cheshire after the retail chain and Dubai-based Landmark group, which collectively hold 38 per cent of Debenhams shares, voted against his re-election.

Every director up for re-election received over 11% of votes against their re-election.

However, Sir Ian had "concluded it is no longer possible for him to remain chairman of Debenhams", it said. However, Bucher is to continue in his position, reporting to the board.

It bought department store chain House of Fraser out of administration for £90m a year ago and analysts have speculated that Ashley might want to put the two department store groups together.

"The board is mindful of its responsibilities to all shareholders and has full confidence in Sergio and in the management's plan to reshape the business", it said.

Debenhams major shareholders include Sports Direct International PLC, with almost a 30% stake, Brandes Investment Partners Inc, with over 12% stake, Schroders PLC, with a 9.8% stake, and Milestone Resources Group Ltd, which holds a 7.3% stake.

"I recognise that individual shareholders have wished to register their dissatisfaction". I am looking forward to working with Sergio.

Before Christmas, Mr Ashley offered Debenhams a £40m loan and claimed the retailer was on the brink of collapse in a letter to Mr Butcher.

Terry Duddy, Debenhams' senior independent director, will replace Cheshire as interim chairman with immediate effect. The company said it still expected to meet profit targets - but only after £30m of additional cost savings, starting with a hiring freeze at its head office and the earlier than planned closure of its Lodge Farm distribution centre in Northamptonshire.

He confirmed that Debenhams was in talks with its lenders about its £520m credit line.

Like this: