Debenhams chairman Sir Ian Cheshire has stepped down from his role after two of the retailer’s major shareholders voted against his re-election to the board.
The vote took place at Debenhams’ annual general meeting on 10 January. Sports Direct, which owns 29% of Debenhams shares, and Milestone Resources, which owns a 7% stake, both voted against Cheshire.
”Given the decision of two major shareholders who voted against his re-election to the board, Sir Ian has concluded it is no longer possible for him to remain chairman of Debenhams,” the company said.
Sir Ian joined the board in January 2016 and was appointed chairman the following April. He has been replaced by Terry Duddy, Debenhams’ senior independent director, on an interim basis.
The same two shareholders also voted against the re-election of CEO Sergio Bucher to the board. However, Bucher will remain in post.
Debenhams said: ”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. As a result, the board and Sergio have agreed that he should continue as CEO of Debenhams, reporting to the board.”
It added: ”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.
”The board is committed to delivering the appropriate capital structure to ensure a sustainable and profitable future for all stakeholders.”
Duddy said: “I recognise that individual shareholders have wished to register their dissatisfaction. I would like to thank Ian for his strong leadership of the board and his contribution to the business. We wish him all the best for the future. I am looking forward to working with Sergio. My first task is to meet with shareholders so that I understand any concerns that they may have.”
Cheshire added: “It has been a great privilege to get to know my Debenhams colleagues over the past three years. 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”.
This morning, Debenhams revealed that group like-for-like sales dipped 3.4% in the six weeks to 5 January, as it battled “challenging” trading conditions and the growing pressure to discount.