Yahoo Finance Debenhams chairman ousted by Mike Ashley
The chairman and chief executive of Debenhams have been ousted from the retailer’s boardroom after two major shareholders – including Mike Ashley’s Sports Direct – voted against them.
The chairman, Ian Cheshire, stepped down immediately while the chief executive, Sergio Bucher, will stay on but not as a director.
Sports Direct, which owns nearly 30% of Debenhams shares, and Milestone Resources, controlled by the Dubai-based retail billionaire Micky Jagtiani, who owns a 7% stake, both voted against Cheshire and Bucher.
A total of 56% of shares voted were against both directors after a number of shareholders either withheld or failed to use their votes.
Cheshire joined Debenhams three years ago and he appointed the former Amazon executive Bucher. He told the board after the group’s shareholders’ meeting that he had concluded “it is no longer possible” to remain on the board without the backing of key shareholders.
Bucher is to stay on as the board said it had “full confidence in Sergio and in the management’s plan to reshape the business”.
“The board believes that it is in the best interests of Debenhams plc that the executive team remains fully focused on delivery of the plan. In the meantime, the board remains open to constructive suggestions from shareholders that are in the interests of the business as a whole.”
Cheshire, a former boss of the B&Q owner, Kingfisher, said: “In unprecedented market conditions the team has worked incredibly hard to build a format for the future and a comprehensive plan to reshape the business, which will put Debenhams on the road to recovery and future success. Whilst it is right that I step down today, I wish the team at Debenhams every success in the future”.
The dramatic events came after weeks of pressure for change at Debenhams from Ashley as the debt-laden store chain struggles to turn around a slump in sales and profits.
Ashley wants a closer relationship between Debenhams and his struggling House of Fraser department store chain – which Sports Direct bought out of administration in August.
Earlier Debenhams had reported sales at established UK stores were down 6.2% in the 18 weeks to 5 January. 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.
Debenhams said it had started talks with its bankers about refinancing. The group has put on hold its plan to raise cash by selling its Danish Magasin du Nord chain after failing to receive strong enough offers.
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. It currently has 165 UK stores.
